Economics of Obesity

Question 1

BMI

Answer 1

Long term trends find that improvements in body size are reflected in improved health
Through the second half of the 20th century to today, increased weight associated with negative health outcomes

KG over Height in Meters Squared

Question 2

Health Internalities and Externalities

Answer 2

Externalities are the cost of poor health is an externality, paid for by taxpayers.

Internalities are the long-term benefit or cost to an
individual that they do not consider when making the
decision to consume a good or service.

Question 3

Nudges

Answer 3

Simple rational policy
- Change prices through taxes and subsidies
(regressive, mixed effectiveness)

• Provide more information
  (too many choices)
• Remove poor choices through regulation
  (patenalistic)

+ multiple policy goals and heterogenous consumers

Self Control / Present Bias; allow people to make choices ahead of time

Default options; make the default healthy

Emotional imagery; make healthy food enticing

External cues; make portions smaller / standrise sizes

Question 4

Price elasticity of demand

Answer 4

THe relationship between change in price and a change in demand. The elasticity of demand for high density demand calorie rich is mixed.

Question 5

Cutler, Glaeser, & Shapiro. (2003). Why Have Americans Become More Obese? Journal of Economic Perspectives, 17 (3): 93-118.

Answer 5

Price of calorie dense foods has become relatively cheaper compared to healthier foods. Food technologies has made producing food cheaper. Burning calories has become relatively more expensive / higher oppurtunity cost, with less labor intensive work in general.

Question 6

Just & Gabrielyan. (2016). Food and Consumer Behavior: Why the Details Matter. Agricultural Economics, 47: 73–83.

Answer 6

Multiple policy goals. Heterogenous customers.
For example, poorer whiter women are more at risk.

Behavioural Models
- Visibility of healthy foods

Convinience of healthy foods

Potion norms

Expectations

Behavioural interuptions –> explicit choice

Payment type

Question 6

Lessons from Berkeley’s Sugar-Sweetened Beverage Election and Tax.

Answer 6

Recorded revenue, quatnity, and retail price of soda comapred to controls. The campaign had a significant impact, with media coverage having more impact than taxation.

Mexico soda tax; subsitutes

Question 7

Wansink and Just (2013)

Answer 7

Removing trays to reduce food waste. People take less salad. Unintended consequences