Advertising and Obesity of Children-BECKER

A report this week from the Institute of Medicine made the front pages of many newspapers and was reported extensively on television. Based on its examination of numerous studies of possible links between TV watching and weight gain, the report attributed a significant part of the increasing obesity among teenagers and young children to television advertising of foods and drinks with high sugar and fat content. It recommended that companies work with scientists and others to reformulate their products and ads. Some persons at the Institute of Medicine went further and raised the prospect of possible Congressional regulation of TV ads oriented toward children, even though, as we will see, the evidence provided by the report is weak and not persuasive. Before examining this evidence, obesity of children should be placed in perspective. Obesity has increased for most of the past twenty -five years among all groups and at all ages, including the elderly. Presumably, advertising of goods like Big Macs and Coke Cola has less influence over the consumption of adults, particularly that of older men and women. Moreover, obesity has grown in all developed countries, even those with much sharper controls over advertising. Obesity in the United States and elsewhere started increasing particularly rapidly in the early 1980's. Studies by economists, especially those by Richard Posner and Tomas Philipson, Jesse Shapiro, David Cutler, and Edward Glaeser, and Fernando Wilson sifted through many factors that might be responsible for this accelerated trend toward greater obesity. The two most important factors highlighted by these studies is the lower effective price of fat due to the development of efficient fast food outlets that save on time, and for teenagers a more sedentary use of leisure time due to the growth in time spent with computers, browsing the internet, and playing video games. There is no doubt that McDonald's and other companies tend to increase their revenues when they raise advertising budgets-otherwise, companies would not be spending as much on advertising. But most of the increase in sales to a company when it advertises more tends to come at the expense of sales by competitors. So if Wendy's raises its advertising, sales by McDonalds and other competitors would tend to fall. To the extent that advertising mainly redistributes customers among competitors, the elimination of advertising of fast foods or sugary beverages through regulation would have relatively little effect on the overall demand for these products. As far as I could tell from examining the complex report by the Institute of Medicine, it did not include any studies (presumably because none are available) that directly looks at the effects of advertising by fast food and beverage companies on the overall consumption of these goods by teenagers and younger children. Instead, virtually all the studies available to them examine the effects on children's weight of greater or lesser exposure to television. The problem with such studies, even in the very few that are carefully designed, is that they cannot separate the effect on weight of greater exposure to advertising through watching more television from the effect on the propensity to gain weight from other activities correlated with watching TV, such as more sedentary behavior, or eating popcorn and other snacks while watching. The authors of the report recognize this serious shortcoming in a section on "Recommendations for Future Research", where they say "Even within the domain of television, most of the research that relates television viewing to diet and to diet-related health does not distinguish exposure to food and beverage advertising from exposure to television in general. This lack of relevant research severely constrains the findings that can be drawn about the influence of food and beverage marketing on the diet and diet-related health of American children and youth". A PhD study in progress by Fernando Wilson at the University of Chicago suggests that this qualification is crucial. He shows that the big increase since 1980 in children's use of time was not toward greater television viewing, for this remained rather constant during the past 25 years-and maybe has declined slightly. What increased by a lot was time spent with computers and videos games at the expense of lesser time spent at sports and other more active activities. Since advertising on computers and video games has been far less important than advertising on television, it is hard to see how the growth in obesity during the past 25 years could be explained at all by advertising toward children, unless TV advertising became much more effective than it had been. Advertisements clearly influence the demand for different goods, but they also are sensitive to the desires of consumers, including the influence of parents over what is consumed by their children. At the same time that consumers have been gaining a lot of weight, they have become more conscious about eating oats and other high fiber foods, about the vitamins added to different cereals, about the sugar content of foods and beverages, and eating other healthy foods. A study a few years ago by Pauline Ippolito and colleagues at the Federal Trade Commission found that when some parents began to want healthier cereals for their children, companies were quick to respond with new and healthier cereal brands. As soon as they were allowed to do so, they also began to advertise the healthy advantages of oat cereals and other products with high fiber content or with many vitamin supplements. If children nowadays are heavier because they are less physically active than they used to be, or because their parents find fast food cheap and convenient, it is difficult to see how advertising by food and beverage companies are to blame. And despite the hype the study received, the Institute of Medicine's report on obesity and advertising did not present any convincing evidence that television advertising oriented toward children has been responsible for the increase in children's obesity during the past quarter century.

Comments

[Arun Khanna]

I conjecture that fast food firms increase advertizing in years when average consumer disposable income per free hours per week (free hours=total hours-work hours-commute time-sleeping hours) goes up. In years with higher consumer income per free hour consumers making the leisure time/spending money on the margin tradeoff prefer buying fast food rather than cooking. Hence it appears like advertizing is correlated with growing children obesity when it is the underlying omitted variable which drives the relation.
In my subjective opinion, more and more people worldwide are making a socially sub-optimal tradeoff between making money versus time spent on parenting.

[Josh Doherty]

I have not seen the study, but it seems to focus on the "overall" levels of fastfood consumption. It seems to me that the study might be overlooking a key driver. Specifically, that it is focused on the generation of children produced by the Baby Boomers. More Baby Boomers = more (larger population pool)children = more overall cosumption of fastfood.

Finally, it seems unforgivable that the study would omit the previous findings of the influence of cost/gram of fat and the influence of sedentary activities. This smells like a government agency seeking to yank emotional strings to expand government influence/regulation.

[Josh Doherty]

Follow-up point:

Banning advertising of fatty foods might meant that less attention is paid to these foods. Out of sight, out of mind. As result, it is possible that a lack of public debate coulod cause people, especially the poor and uneducated, to consume more fatty fastfoods. The mindset might become "if no one is telling me it is bad, it must be good."

[nate]

One solution might be more interactive new media coupled with exercise. I find televisions mounted on exercise machines to help with the ennui of repetitious physical exercise. It also boosts productivity: why watch Saturday business news on a couch when you can do so at the gym? I am still waiting for internet kiosks mounted to exercise machines (to enable blogging while exercising). iPod docking stations might also be very nifty.

What appeals to me might not appeal to youths, so more experiments and research on youths may be needed.

I find french fries somewhat addictive.

[albatross]

It's not just that people are no longer paid to expend calories, it's that we've designed whole neighborhoods, workplaces, etc., to be hostile to doing so. The last neighborhood we lived in was close to a bunch of stores, but had no sidewalks or crosswalks, so that it was basically unworkable to walk with my kids to these nearby stores. Around my office, getting more than a block or two away involves a bunch of walking alongside a busy road with no sidewalk, crossing streets with no signals for pedestrians to cross, etc. There's no reason for this but bad planning.

[nate]

A lot of healthy stuff does not sell well, especially in large enough volume for companies driven by economies of scale. Consider coffee. People want coffee products made for them, and made with lots of chocolate and cream and other perks.

[nate]

The intersection of virtual reality video games and exercise might be entertaining.

[John Luik]

The problem with the IOM claim is that it fails to meet Professor Heckman's criteria for a properly specified causal model which the direction of causality to be properly determined. The IOM authors conceed that the studies they reference did not measure advertising exposure, which on their account is the causal factor, but instead relied on television viewing as a proxy for advertising exposure. Thus we have studies making a fundamental claim about the supposed effects of advertising on children's food habits that have not in fact measured children's exposure to advertising but instead children's exposure to television. This makes the claim to a scientific report of a scientific conclusion a travesty.

[Bill Churchill]

It might be usefull to interview Nielsen and TIVO participants in order to gain the additional info needed to run the numbers on this and other related issues. A virtual goldmine of information exists as to the profile of exposure--what is needed is a harvest of the knowledge of the longitudinal effects of that exposure.

[Bill Churchill]

It might be usefull to interview Nielsen and TIVO participants in order to gain the additional info needed to run the numbers on this and other related issues. A virtual goldmine of information exists as to the profile of exposure--what is needed is a harvest of the knowledge of the longitudinal effects of that exposure.

[Wes]

There is no doubt that McDonald's and other companies tend to increase their revenues when they raise advertising budgets-otherwise, companies would not be spending as much on advertising.Actually, all that can be concluded is that the advertising executives at McDonald's decide on a level of advertising that leads to the greatest benefits for them personally.If shareholders knew for certain how advertising would affect McDonalds and fired executives who didn't do the right amount of advertising then it would be possible to conclude that McDonald's does the right amount of advertising.The reality is that the vast majority of shareholders have very little idea how much advertising McDonald's should do and very little influence of whether executives are fired so McDonald's advertising decisions reflect the personal preferences of the advertising executives.Saying that advertising executives at McDonald's decide on the right amount of advertising is like saying that dictators that secretly torture people decide on the right amount of torture. If people don't know what is going on and have no way to effect change then it can not be concluded that the right decisions are being made.

[nate]

Aren't there stats that show the amount of money spent advertising all kinds of routine, mundane consumer things (food and other) dwarfs money spent on advertising policy debates and political campaigns?

When was the last time the U.S. filled a stadium to listen to some sort of a debate between two heavyweights on a very meaningful public policy issue or election?

Maybe this is a start?

http://blogjam.pajamasmedia.com/archives/2005/12/post.php

[Michael]

First, am I the only one who sees the irony in publishing a report on TV watching causing obesity on a televised news program? At least they'd be reaching their intended audience, I suppose.

I would say that the advertising theory falls apart as Becker stated, and to add to that is simply the general trend away from physical activity in our society. As albatross mentioned, it's becoming more difficult to be physically active in our world because frankly it seems less efficient. Why would anyone want to walk to work? It takes more time that could be better spent actually working or catching up on sleep. There's little incentive to exercise aside from the health benefits, and when that's placed next to the cost in terms of time and discomfort (after all, as enjoyable as exercise is, to me it is still hard work) as well as the idea that there are numerous better 'quick-fix' solutions to being overweight, the maintenance routine of working out in order to avoid the need for those quick fixes loses the attention it deserves.

I'd also like to add that with as many different "programs" and "secrets" to losing weight already out there, people are probably so confused and possibly jaded on the subject that perhaps they just don't care anymore.

[Thomas]

I thought farm subsidies were at least a small reason for obesity in this country. Food is so cheap and advertising is so expensive that a fast food place can have "word of mouth" advertising based on how huge their portions are.

[nate]

Cramer on CNBC says Monsanto will address this situation. If I am not confused, Cramer says Monsanto has some sort of genetically modified seed for a bean that is healthier for consumers than historical beans.

[GARYGECH]

A favorite topic of a group of us at the Los Gatos Roaster in Silicon Valley is obesity. There is nothing like a group of entrepreneurs to discuss it.

The economics of obesity are pathetically easily to understand.

In 1980, Coca Cola along with many other companies switched from refined sugar to corn syrup. Since them, nearly every product has corn syrup. Corn syrup is far more stable and less expensive that sugar.

Since that time, people have gotten more obese. Remarkably, obesity is a micro-economic problem not a macro-economic problem.

I suppose the key question is the utility curve of a donut. We have to ask ourselves, is a donut parato optimal compared to say a bike ride.

Eating a donut is much safer than riding a bike based on Kip Vinsici's research. The chances of being crushed by a car are much higher than choking on coconut.

Rather that refer back to the politics of blame, we have to appreciate peope's choices. As a Republican, I am for eating what ever you would like.

Unless, of course you keep Kosher which is the best single reason to become a vegetarian.

[nate]

"Eating a donut is much safer than riding a bike based on Kip Vinsici's research. The chances of being crushed by a car are much higher than choking on coconut."

The dangers from riding a bicycle and eating a donut are not perfectly analogous. Danger from riding a bike may often be inflicted by behavior from people around the bike rider (e.g., car drivers unawares, lack of bike paths, etc). Danger from eating excessive donuts without exercise may be more self-inflicted. Also, transportation is often unavoidable, and riding a bike during transportation may improve productivity. Eating a donut, vs. selecting other forms of food, may not improve productivity to the same extent as choosing to commute via bicycle (and investing $ that would have been invested in an auto) vs. commuting in an Escalade.

The other thing to add on the Monsanto product is that, in addition to being healthier, it may taste the same or better as the unhealthy product.

[Half Sigma]

Sounds like a simple class issue to me. Upper class parents make their kids do other stuff besides watch TV.

[charles]

I think you are absolutely right. There are lots of other important things to learn for them.

[Arun Khanna]

Obesity in the U.S. used to be discouraged by social norms in the marriage market. I conjecture that the increase of unskilled immigrants in the U.S. has undercut that social monitoring role since lower wage earning immigrants are more willing, on average, to marry obese Americans.

[nate]

the link below takes you to the chicagoist blog.

there are many hidden costs to obesity.

http://simurl.com/bb-pp-mm

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