Obesity, Business and Public Policy

Obesity, Business and Public Policy

Edited by Zoltán J. Ács and Alan Lyles

The effects of obesity have become practically ubiquitous in the US. This book aims to provide an alternative framework through which to explore the important and controversial obesity debate that has spilled over from the medical community. This book is not about obesity as a medical condition, nor does it offer a wide-ranging discussion on the health effects of obesity or the role of the ‘right’ diet.

Chapter 10: Tax Solutions to the External Costs of Obesity

Julie Ann Elston, Kenneth R. Stanton and David T. Levy

Subjects: business and management, organisational behaviour, public management, economics and finance, behavioural and experimental economics, welfare economics, politics and public policy, public administration and management, public policy


Julie Ann Elston, Kenneth R. Stanton, David T. Levy and Zoltan J. Acs INTRODUCTION In previous and subsequent chapters the case has been made that the current obesity problem is a consequence of an infrastructure of obesity. That means that in order to solve the problem we need to think carefully about the parts of the infrastructure that can be controlled and which mechanisms are likely to be the most effective means of control. The roles of individuals, governments, business and legal structures are of critical importance in analysing the potential for success of any proposed policy solution. In this chapter we explain how tax mechanisms could be applied to the infrastructure to improve diet. To aid in understanding the obesity problem and its potential solutions, it is useful to divide our view of the infrastructure into two parts – supply and demand. Some aspects of the infrastructure directly affect the availability or supply of foods or activities that contribute to obesity. Other portions of the infrastructure do not affect the supply but do restrict or alter the demand side, or use of such foods or activities. As an example, banning soda and snack machines from schools is a direct restriction on supply but educating the students in order to encourage healthier preferences is an attempt to alter demand. In some cases, this distinction between the supply side and demand side can be rather subtle, but as a broad tool for evaluating policy prescriptions it remains useful. From...

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