Aug 4, 2009

How to fight obesity...NOT!

According to the Telegraph the Food Standard Agency, undertaking a series of initiatives to fight obesity in the UK, has recommended food and drinks companies to reduce the size of their products, especially the ones with high caloric content. For example, the Mars Bar of 58 grams should be sold also in 50 grams. Cans of Coke (and other sodas), should be sold in the 250 ml version instead. Of course, the initiative did not get much appreciation.
"Forcing" food companies to change their products does not seem the right policy. If sizes are smaller, you may end up buying more of the same, with the perverse effect of having more calories after. The Economist explains that a fat tax may not be the right policy either, but the article misses the point completely (very disappointing from them, makes me think about renewing the subscription...). First, one of the study mentioned shows that the long term effects of a pigouvian tax are positive in the long run. Second, if people are price inelastic at high level of addiction, it does not mean that a pigouvian tax is ineffective. "Less addicted" people will end up consuming less of it (which is good for their health and the health care system), but it also means that complementary policy are needed. Education and information help fostering new social norms. Third, if poor people spend a high budget on junk food, it's not a matter of revealed preference : junk food in fact apparently kills people, and if fresh fruits cannot be afforded because their price it's too expensive compared to a cheesburger, it's because their market price is distorted by other policies which we all know about...the argument of fairness "and so it's better to leave things as they are" in this case sounds extremely intellectually dishonest.

4 comments:

Sebastian said...

wait...I do not know! I am not an expert on obesity and Cheeseburger pricing. So which are the policies that distort cheeseburger prices as opposed to fresh vegetable and fruit prices?

Pierre-Louis said...

I'm all for asking coca cola to sell smaller cans...when only 50 cl bottles are available (as in rigot) I end up drinking more than I want (and most people agree)...

Coke can sell these bottles at a higher price hence it maximises profits by selling only big bottles since u need to buy one every time u want coke...

ex: i wanna drink coke 4 times a week but only 25cl but I end up buying 4 50cl bottles since teh prodcut does not stay fresh form one day to the next...

damn quest for optimal taste...

Salvi said...

the reference was about policies that distort prices of fresh fruits, I know nothing about cheeseburgers either of course...except when I cook one for myself :-)

as regard to the 25 cl bottle of coke...it is already sold, cause I have seen it around... btw, I also want to drink 25 cl of coke, so you should have asked me to share the bottle to make both of us better off: price of a 33cl can is 1 euro, the 50cl is 1.5 euro, if we share we pay less and both drink our optimal quantity

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