The Economics of Obesity: Costs, Causes, and Controls; Burgeoning Health Care Costs and Lost Work Time Make Obesity Expensive for Society. Can Policies Help Curb People's Appetites for Cheap, Calorie-Dense Foods and Encourage More Physical Activity?

By Ulrich, Clare | Human Ecology, December 2005 | Go to article overview

The Economics of Obesity: Costs, Causes, and Controls; Burgeoning Health Care Costs and Lost Work Time Make Obesity Expensive for Society. Can Policies Help Curb People's Appetites for Cheap, Calorie-Dense Foods and Encourage More Physical Activity?


Ulrich, Clare, Human Ecology


The box-office hit Super Size Me vividly brought the dangers of fast food and inactivity to the mass media. Most people these days know that diets high in trans fats, sugar, and salt combined with lack of exercise are stepping stones to obesity. Yet 400,000 people die each year in the United States of poor diet and inactivity, an increase of 33 percent since 1990. If the trend persists, obesity will soon replace smoking as the number one cause of preventable death in this country.

Why aren't we getting it?

"Simply telling people to behave differently may not be very effective; you need to alter the trade-offs people face to create incentives for them to do what you want them to do," John Cawley, associate professor in Human Ecology's Department of Policy Analysis and Management, told listeners during a presentation titled "Economics of Obesity" given at Cornell's Ecology of Obesity conference held June 6 and 7, 2005.

By "trade-offs" Cawley means the kinds of things people gain and give up when they make decisions. "If resources were limitless," he explains, "if we had endless amounts of money and all the time in the world, we could eat anything and everything we wanted and still maintain our ideal weight. But we're constrained by our money; we can't afford everything. We're constrained by time; there are only 24 hours in a day. And we're also constrained by biology; the foods that give us short-term pleasure--like high-sugar, high-fat foods--unfortunately have this long-run impact of raising our weight. When resources are scarce, people have to make trade-offs."

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Studying the trade-offs people make sheds light on how economic forces contribute to weight gain. A look at economics is also useful for determining to what extent obesity is a personal issue and to what extent it involves society, Cawley adds. An economic framework can provide justification for whether something should be done about an obesity-related problem--whether the government should be involved, for instance--and what could actually be done to intervene to affect the kinds of decisions people make.

There's no shortage of data quantifying how obesity is very much a public problem, Cawley pointed out. The Surgeon General recently reported that 27 percent of Americans are obese and 61 percent are overweight. About 13 percent of children and adolescents are also seriously overweight, 70 percent of whom are likely to become overweight adults.

While premature death is one consequence of obesity, the condition is more frequently linked to disease than mortality and requires long-term health management. Complications such as diabetes, arthritis, heart disease, stroke, certain cancers, and depression increase health-care costs for obese people by 36 percent and medication costs by 77 percent. Total health-care costs for obesity-related problems were tabulated at $75 billion in 2003. Since approximately one-half of these costs are financed by Medicare and Medicaid, U.S. taxpayers' pocketbooks are directly pinched, Cawley noted. Higher insurance premiums add another wallop. In addition, as a result of compromised health, obese people suffer indirect costs such as lost work time and wages, lower productivity, and early retirement to the national tune of about $50 billion a year. Their employers lose, too.

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Fueling the increase in obesity is the average cost of food, which has fallen 15 percent between 1978 and 2000. Supply and demand dictates that when goods get cheaper, people tend to buy more of them. This appears to have happened with food.

But all foods are not priced equally. Cawley cited a study conducted by Adam Drewnowski, professor of epidemiology at the University of Washington, who recorded the cost of food per calorie and the density of calories in various food items. Drewnowski found that foods that are energy dense--oil, margarine, and sugars--are very cheap per calorie to buy and that buying healthy foods such as fresh fruits and vegetables and lean meats increased a food budget by 5,000 percent per calorie.

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