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The Costs of Physical Inactivity

Toward a regional full-cost accounting perspective

Author: Market Economics Ltd, Wellington Regional Strategy, Waikato Regional Council and Auckland Council.Front cover of report image


Physical inactivity is a serious public health issue in New Zealand, as it is in many other countries of the world, causing significant economic costs.Local government plays an important role in motivating and providing for people’s physical activity, including providing transport infrastructure, active transport opportunities (cycling, walking, public transport, walking buses), urban design and land use planning, and provision of parks and sport and leisure facilities.   Waikato Regional Council, Auckland Council and Greater Wellington Regional Council jointly commissioned a study to examine the full costs of physical inactivity in their regions.  The study undertaken by Market Economics found that the total cost to the country of approximately half the population not having adequate physical activity, was approximately $1.3billion in 2010 ($106 million for the Waikato region, $402 million for the Auckland region and $141 million for Wellington).  

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Table of contents

  Executive Summary i
  Abbreviations 1
  Glossary of key terms as defined with respect to physical inactivity. 2
1. Introduction. 4
1.1 Background - Full Cost Accounting (FCA). 8
1.2 Choice of Method. 10
1.2.1 The GPI Atlantic Approach. 11
1.2.2 Methodology Used. 12
1.3 Defining Physical Activity. 12
1.4 Physical inactivity and epidemiology. 13
1.5 Scope of Study. 16
1.6 Information Sources. 16
2. Conceptual Framework and Methodology. 17
2.1 Cost of Illness Methodology. 18
2.1.1 Prevalence of physical inactivity. 19
2.1.2 Relative Risk. 19
2.1.3 Population Attributable Fraction (PAF). 21
2.1.4 Confounding. 23
2.2 Methods for Estimating the Cost of Diseases. 24
2.2.1 Direct costs. 24
2.2.2 Indirect costs. 29
2.2.3 Other Costs Associated with Physical Inactivity. 36
3. Results: The Cost of Physical Inactivity. 38
3.1 Direct Health Costs. 39
3.2 Indirect Health Costs. 44
3.3 Other Costs. 48
3.4 Summary of results. 50
4. Discussion. 52
4.1 Addressing the Costs of Physical Inactivity. 52
4.2 Applicability of the Full Cost Accounting Method. 57
4.3 Recommendations and further work. 61
5. Conclusion. 63
6. References. 67
Appendix 1: Measuring Physical Activity. 78
Appendix 2: Review of Previous Burden of Illness Studies. 79
Appendix 3: Review of Physical Inactivity Surveys in New Zealand. 81
Appendix 4: Details of the key findings from the 2007/08 Active NZ Survey for the three regions. 83
Appendix 5: Calculation of the Population Attributable Fraction. 86
Appendix 6: International Statistical Classification of Diseases and Related Health Problems
10th Revision (ICD-10) used in this study to identify conditions treated in hospitals.
Appendix 7: Chemical names of drugs used to treat illnesses. 90
Appendix 8: Data used for calculating the direct medical costs. 91
Appendix 9: Research and Disease Screening Costs. 95
Appendix 10: Addressing Information Gaps on Direct Costs. 97
Appendix 11: Review of methods to calculate indirect costs of illness. 103