The Naked Economist
The Fat of the Land
While the nation's attention was focused last month on our newly arrived 300 millionth citizen, we overlooked another national milestone: We now collectively weigh 60 billion pounds.
OK, that's kind of a rough estimate. But there's no quibbling with the larger issue: America is in the throes of an obesity epidemic.
America Super-Sized
To more fully understand the obesity issue, you can read the 45-page report generated by a recent conference on the economics of obesity sponsored by the University of Chicago and the USDA. Or you can just go to Disney World and look around.
The report has the statistics that confirm what you'll see at Disney World, or anywhere else that a cross-section of Americans gather. Nearly two out of three Americans are overweight or obese. The proportion of overweight children and adolescents has tripled since the 1970s.
As always, the market is responding to the needs of our growing nation. According to the New York Times, the Goliath Casket company now sells the "triple-wide coffin" that's 44 inches across rather than the standard 24 inches. It has extra handles, reinforced bracing, and can handle up to 700 pounds. This is why I love markets.
Big People, Big Costs
Alas, markets alone will not fix our collective flabbiness. Obese individuals may pay for their own triple-wide coffins, but they don't pay for all of their own health care costs. We all share that.
Obesity causes or exacerbates a long list of expensive diseases: type 2 diabetes, heart disease, stroke, some kinds of cancer, and a host of muscular and skeletal issues associated with carrying extra weight.
(To add an experiential learning component to this column, try picking up the heaviest chair in your living room and carrying it with you to work; now imagine how your hips and knees will feel if you do that for 40 years.)
As with smoking, the salient economic issue is not what people do to their own bodies, but the cost they impose on the rest of society. According to economists, the medical costs paid by the obese are roughly $10,000 higher than the non-obese over the course of their lifetimes. Because insurance companies can't charge differential premiums based on weight, those excess health care costs are spread across the rest of the insured population.
What Can Be Done?
Let's start with what we shouldn't do. We shouldn't sue fast-food restaurants, however much political mileage that may generate. Unlike the cigarette companies, they haven't lied or covered up the dangers of their products.
Anyone who doesn't realize that the Triple Whopper (yes, there is actually one, with three-quarters of a pound of beef) is a bad nutrition decision has cognitive problems that dwarf any obesity issues.
Nor is the food highly addictive in the technical sense of the word. Consuming fast food doesn't cause an overwhelming craving to have more of it. Crack addicts will push their grandmother down the stairs and take $7.30 out of her purse to get a fix. People who like Triple Whoppers don't do that. In fact, I'm not even sure they would stand out in the cold to eat their burgers, like smokers are willing to do.
Our understanding of the obesity epidemic is still rudimentary, but economists are pointing to causes that are fairly intuitive. Our jobs and lifestyles require far less physical activity than they did 20, 50, or 100 years ago. Meanwhile, the food industry has grown ever more efficient at producing, distributing, and marketing "ready to eat" foods.
It's progress of a sort. While the electronics industry has given us smaller gadgets and beautiful flat screens, the food industry has given us much cheaper calories. The problem is that flat-screen TVs don't give people heart disease.
No Quick Fixes
This is the point where I'm supposed to present the quick fix -- the policy equivalent of a miracle diet. I don't have one. Instead, I have three general proposals, none of which strikes me as a sure fix for shedding 20 billion pounds or so.
- Lots of little things: Ban vending machines in schools; reinstate recess in the schools where it's been curtailed; encourage more active lifestyles; design our communities so that they're more amenable to walking; and so on.
There's nothing wrong with any of these ideas, but I don't see them having a profound effect. After all, we know that we need to exercise more and eat better. We just don't do it.
- Raise the cost of food, particularly highly-calorie processed foods.
Economists believe that to change behavior, you need to change incentives. And the most effective way to change incentives is to change prices. Thus, the elegant theoretical answer is to tax the highly caloric processed foods that appear to be at the root of the problem.
If the Triple Whopper is cheap, and the people who eat lots of them end up having hip replacements that I have to pay for, then we ought to make the Triple Whopper more expensive. But to be honest, I'm not sure how this could be implemented without creating a bureaucratic, social-engineering nightmare. Junk food is like pornography -- you know it when you see it, but it's hard to define in any systematic way.
- Allow insurance companies to use differential pricing based on weight, fitness, or some combination of the two.
Smokers pay more for insurance because they're more likely to get sick. Why not do the same for the overweight and obese? Again, I like the idea better in theory than practice. Our measure of overweight and obesity, the body mass index (BMI), is an imperfect measure of health and fitness.
More important, in a country with nearly 50 million uninsured, I'm not sure I want to make insurance more expensive for a large segment of the population when there's a significant possibility that they may no longer be able to afford insurance at all.
For Our Own Good
To economists, who've always assumed that individuals behave more or less rationally, obesity is a puzzle. After all, the private costs of obesity -- everything from social pressure to premature death -- are enormous. We have ample reason to slim down, and yet we don't.
I was speaking to a group in Canada about health care not long ago when a woman asked if fining obese people might change their behavior. I answered glibly, "If they're already killing themselves, what difference will a $200 fine make?"
Somehow we need to improve on that answer, because as America grows bigger, the social costs will, too.
