Food as a Public Good and Obesity as an Externality Research Paper

  • Length: 5 pages
  • Sources: 8
  • Subject: Business - Companies
  • Type: Research Paper
  • Paper: #51126364

Excerpt from Research Paper :

Health Public Good

Public Health as a Public Good

The United States has one of the lowest cost food options available to its consumers in the world. For an extended period, people assumed that this was a benefit of capitalism and that competition had helped push down the prices and made food available at lower costs through the market. However, many externalities have arisen in these circumstances that are now pointing researchers to question the consequences of having mass processed food available to consumers. The United States, as well as many other industrialized nations, currently has epidemic rates of obesity as well as the related obesity diseases such as heart disease and diabetes.

This trend is not restricted to just adult and the obesity rates among children have subsequently risen as well. This has made many instructions and activists compare the effects of poor diets and their health consequences to smoking cigarettes and the health consequences that result from inhaling tobacco smoke. If this comparison is reasonable, then many regulations may be relevant to the overconsumption of the types of foods that the fast food industry offers; especially regarding children. This analysis will consider the role of various stakeholders in the debate about what to do about the public health crisis that is unfolding in the United States.

Public Health

There are many different factors that can be attributed to the high rates of obesity that have developed in the United States. Americans have the lowest-cost food supply in the world and spend the lowest proportion of disposable income on food and until recently, no one has seriously questioned whether a low-cost food supply brought anything but benefits to the United States (Drewnoski and Darmon 270S). The low cost of foods produced in the U.S. are a result of greater production yields, higher efficiency rates, and in some cases there are massive farm subsidies paid to farmers from public funding that artificially drive the prices of certain food products down.

Two-thirds of U.S. adults are overweight or obese and in general, rates of overweight and obesity are higher for African-American and Hispanic women than Caucasian women, higher for Hispanic men than Caucasian and African-American men, higher in the South and Midwest, and tend to increase with age; research also shows that the heaviest Americans have become even heavier the past decade (Food Research and Action Center). Therefore, not only are the obesity rates higher, but they are disproportionately higher among certain demographics. There are correlations between obesity and health in different income demographics as well. Americans who earn more typically spend more money on high quality and more nutritious foods than those with low incomes.

Therefore, there is something of a paradox in the United States agricultural system and the government's role in the combating the epidemic of obesity. One the one hand, says Michael Pollan, a University of California professor, the federal government is campaigning against the obesity epidemic while on the other it is actually subsidizing it by "writing farmers a check for every bushel of corn they can grow (Chicago Defender 1)." Corn is a chief ingredient in many lower cost foods through the addition of high fructose corn sugar which is inexpensive and calorie rich. Therefore many low cost foods use high fructose corn sugar to enhance their products because it's readily available, cheap, and energy dense.

Despite the perceived benefits of having access to inexpensive foods, the reality is that it is not as beneficial as it may seem on first appearance. The good things aren't, it seems, really good, because the extra pounds they bring us increase our risks of heart disease, Type 2 diabetes, high blood pressure, stroke, sleep apnea, arthritis, gallbladder disease and some cancers (Chicago Defender 1). The implications that the inexpensive foods have for at risk populations is typically not counted in any economic analysis's and therefore represents a form of externality that is hard to quantify directly. However, such foods have many implications on public health as well as the health care system in the United States.

The health care system is among the most expensive in the world and the costs continue to grow at an alarming rate. Growing numbers of Americans are uninsured while the costs keep rising (annual growth rate, 6.7%), and the public is increasingly worried about the issue; the U.S. spends more money on health care than any other nation in the world and by 2017, we will be spending about $13,000 per person, according to the annual projection by the Centers for Medicare & Medicaid Services and less than 60% of us are covered by an form of employer's policy (Gill). Furthermore, health care reform and obesity as well as the food system in the U.S. are all closely related issues.

Reponses to Obesity

The World Health Organization stated that the key to maintaining healthy weight was an affordable supply of fresh nutrient-rich foods. Such access could be facilitated through a combination of agricultural subsidies, pricing policies, regulatory action, and consumer education. Such approaches involve a cooperation between governments, academia, and the food industry (Drewnoski and Darmon 271S). "The United States is experiencing substantial increases in overweight and obesity that cut across ages, racial and ethnic groups, and both genders, has been increasing in every State in the Nation [and] has reached epidemic proportions. . . left unabated, overweight and obesity may soon cause as much preventable disease and death as cigarette smoking. (Benloulou)"

In fact, many researchers have made similar claims that compare the over consumption of fatty foods to the damages caused by smoking cigarettes or the use of other tobacco products. By making similar claims to smoking, the case can be made for imposing more regulations on the fast food industry. Like tobacco, the fast food industry is a huge business, with deep pockets. And the reality of obesity is that it is a worrying problem, not just in the U.S. But in Europe and other parts of the developed world. In the U.S. alone, the number of children classified as overweight has doubled since 1980, while the number of overweight adolescents has tripled (Adams 2).

The World Health Organization, and an Expert Committee convened by the American Medical Association, have recommended restricting children's consumption of energy-dense foods as a strategy to prevent and treat obesity (Wood 1). Therefore there is even a strong push against fast food firms such as McDonalds to target these consumer demographics with advertising. Commenting on a McDonald's plan to send Ronald McDonald to schools to preach about nutrition, an aide to a U.S. senator said, "No matter what Ronald is doing, they are still using this cartoon character to sell fatty hamburgers to kids. Once upon a time, tobacco companies had Joe Camel and they didn't get it either (CASE 2-7)"; which again makes the claim that the consumption of unhealthy foods is something akin to the consumption of tobacco.

However, many of the providers of unhealthy foods are proactive in the defense of their reputations. For example, McDonalds, the world's largest food service organization, has even taken steps to squash free speech by filing a libel suit against activists which worked for Greenpeace that produced a fact sheet that outlined some of the health consequences of eating food from the McDonald's menu (Econotes 10). Although high health, social, and economic costs are known to be associated with obesity, the underlying causes of weight gain are less understood yet, at a basic level, weight gain and obesity are the result of individual choices (Philipson, Dai and Helmchen 1). McDonalds as well as the other industry players are quick to point out the fact that ultimately the individual's freedom of choice plays a large part of the equation.

Many cities have tried to combat the obesity epidemic on their own without any federal level intervention. However, such attempts are often met with strong opposition from the restaurant industry representatives; "We have a fundamental problem with government stepping in and treating restaurants as if they are engaged in activity that is at the root of the obesity epidemic," says Jot Condie, president of the California Restaurant Association who blames the epidemic on a web of factors, including sedentary lifestyles and lack of nutrition education (McBride 2). In one legal action against McDonalds the plaintiffs allege, in their fifth and final count, that McDonald's "negligently, recklessly, carelessly and/or intentionally. . . [distributed]. . . food products that are physically or psychologically addictive." And that this cause of action alleges that McDonald's caused its consumers to become physically or psychologically addicted to products that cause adverse health effects (Benloulou).


The effects of the cheap and plentiful food in regards to the health consequences are well-known and have been studied for quite some time. If you eat unhealthy food then you will likely gain weight and suffer from any one of many associated diseases. Despite the problem being fairly straight forward, the solution to mitigating the obesity rate…

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