In the past few decades, obesity rates among American children have skyrocketed. Although many factors have played a part in this unhealthy increase, this paper focuses on how economic policies may be contributing to our children's growing girth and how these policies might be altered to reverse this trend. It examines the economic causes and consequences of obesity, the rationales for government intervention, the cost-effectiveness of various policies, and the need for more research funding.I n the twenty-five years that elapsed between surveys conducted in 1971-1974 and in 1999-2000, the prevalence of obesity rose from 5 percent to 10.4 percent among two-to-five-year-olds; from 4 percent to 15.3 percent among six-to-elevenyear-olds; and from 6.1 percent to 15.5 percent among twelve-to-nineteen-year-olds.
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Economic Factors And Childhood ObesityChildhood obesity is a complex, multidisciplinary issue, so the search for solutions requires information sharing across many fields. To promote such exchange, this paper describes research findings from the field of economics. Relative to other disciplines, economics has only recently been applied to the study of obesity. As a result, there are many useful applications yet to be made.Economics offers several useful tools for the study of childhood obesity: insights into the economic causes and consequences of obesity, clearly defined rationales for government intervention in markets, and the use of cost-effectiveness analysis for comparing policies to prevent or reduce obesity. This paper summarizes recent research in each of those areas. It concludes by discussing the implications for health policy.Economic explanations for the recent rise in obesity tend to focus on changes that give people incentives to consume more or to burn fewer calories. These include the following.FOOD PRICES The real price of food (the price of food adjusted for inflation across all goods and services) has declined greatly in recent decades. For example, between 1990 and 2007 the real price of a two-liter bottle of Coca-Cola fell 34.89 percent, and that of a McDonald's quarter-pounder with cheese fell 5.44 percent.3 Some research indicates that reductions in the price of food account for 41-43 percent of the rise in young adults' body mass index (BMI) between 1981 and 1994. 4 BMI is most sensitive to the price of fast food in particular for youth from families of low socioeconomic status.5 The real price of fruit and vegetables rose 17 percent between 1997 and 2003, 6 an increase that some studies have linked to higher BMI in American children and adolescents. 7,8 AGRICULTURAL POLICIES The decline in the price of food could be due to agriculture policies. However, several studies have concluded that such policies have little impact on consumer prices of energy-dense foods.9,10 About half of farm subsidies are based on historic, not current, production, which limits incentives for farmers to increase output.9 Moreover, U.S. farm policy raises John Cawley (JHC38@cornell .ed...