Obesity: An Externality

by Victoria Rideout

Obesity: An Externality

A very important part of economics is the concept of externalities. An externality is a decision and action of government, firms, or individuals that affect other people that do not partake in the decision and action. An example would be of a man smoking in a restaurant full of non-smokers, as the man smokes he is harming his lungs and the people breathing in his cigarette smoke are also harming their lungs. The man made the decision to smoke and harm his lungs but the other people in the restaurant did not, this makes smoking an externality. The man's decision is not only harming himself but harming the people around him. Government tends to intervene in the actions of people that harms others. There are many externalities in the world, but one that has come up recently is the externality of obesity. In America obesity has become a big problem. In a 2002 report it was found that 30.6% of Americans are overweight or obese. This is just 6.4% more than Mexico, which has an obesity percentage of 24.2. The obesity percentage has gone up since then and is still rising today, doctors have predicted that by the year 2030 42% of Americans will be overweight. When we look at a specific place such as Maine in the U.S., one report shows that in 2008 23.7% of the people living here are obese or overweight, and by the year 2030 55% of people in Maine will be obese, this is up 31.3% from 2008. Obesity is a growing health problem, but what if its also a growing economic problem? Most people know that obesity affects a persons health in a negative way but it also affects your wallet in a negative way too. Obesity raises the price of health care costs. The health care costs for obesity are now as high as that of smoking. This is because insurance companies rely on the theory that more healthy people will buy insurance than sick people. So when more people that are sick or become sick easier, such as obese people, insurance companies have to raise their premiums so they do not lose money. This increases the cost of health insurance for everyone else. This is why obesity is a externality. When people make a choice to eat at McDonalds everyday and become obese, it affects the people that choose to eat a salad for lunch by increasing their health care cost fix the. This has become a real issue for many people, so how do we stop the problem?

Obesity Now Obesity In 2030

Government usually intervenes when externalities start effecting too many people in a negative manner. Lets go back to second hand smoking for a few seconds. When people started to realize that the smoking of others affected their health they wanted someone to do something about it. The government then acted by establishing a law that prohibited people from smoking in public places such as restaurants and schools so that people would not breath in someone elses second hand smoke. In this situation the government made a law to combat the externality of smoking for the safety of peoples health. When dealing with the problem of smoking, the solution was to ban people from smoking in public places, this was a easy and simple fix to the problem, but a lot of externalities dont have that easy of a fix, this seems to be the case with obesity.The government has not found a solution for obesity yet because it is such a touchy topic. One of the reasons for obesity is the food people eat and where they get it from. For example, restaurants like McDonalds and Burger King have very high contents of fat in their food. People that eat there a lot are more likely to be unhealthier than people that dont. The problem that we encounter now is how can the government tell people what they can and cannot eat when it is a right of the people to choose? What if the government ever did tell people that if they are obese that they could not eat at fast food restaurants, this would be considered discrimination. The government cannot act because they would cross the line of being helpful to being controlling. The government does however endorse the consumption of healthy food. By just endorsing healthy food they are not telling people they cannot eat McDonalds but are trying to steer them into the right direction. This keeps the government on the side of being helpful while not crossing over the line of being controlling. In recent years the government has also made laws in schools about feeding kids healthier food. Policys saying that all kids must have at least one fruit on their tray have become more significant in these past years because of Michelle Obama , president Barack Obamas wife, pushing for better school lunches. Some people agree with what the government is doing about obesity and some people dont.My personal opinion on this is that the government is really doing all they can do to fix the problem of obesity. This is because it really is not the governments place to tell the citizens what they can and cannot eat. To address this issue citizens have to take responsibility for causing the issue and do something about it, they cannot expect the government to be able to fix such a social issue. People need to start to make the decision to eat healthy so that they can keep the externality of obesity from affecting others. The obesity of America is still rising and with it, health care costs. Either america gets their act together soon or everyone will be suffering from the consequences.