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12/17/2005

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U.S. Food Policy

The Becker-Posner Blog, a leading economics weblog by University of Chicago Nobelists Gary Becker and Richard Posner, tackles the obesity epidemic this week. The authors had just read the new Institute of Medicine report criticizing junk food advertising for children. As one might expect from these writers, they point out that much of the economic burden of obesity is carried by the overweight persons themselves, so the writers suggest there is little grounds for a government response.

I encourage Becker and Posner to reconsider their view with an open mind. They point out that there is only a comparatively weak "externality" argument for government interest in this problem (although one could talk about how many Americans share the same risk pools, due to medical insurance). However, the market failure that motivates a sensible government response to the obesity epidemic is an information failure. Just for starters, see here for a discussion of nutrition disclosure in restaurants, and here for a discussion of government communication about diet, health, and obesity. Because the federal government actively promotes advertising campaigns to get people to eat more beef, pork, and cheese, at a cost of several hundred million dollars each year, it would be far too timid to suggest that a laissez-faire response will suffice. Policy reform is required.

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