Optimal weight: are government goals for reducing obesity sensible?
Marlow, Michael L. ; Shiers, Alden F.
The rising prevalence of obesity in the United States is often
referred to as an epidemic (although it has apparently leveled off since
1999). Obesity is defined as a body mass index (BMI) of 30 or higher,
and it has been associated with many health problems, including
diabetes, hypertension, high cholesterol, heart disease, stroke, sleep
apnea, some cancers, gallstones, gout, asthma, and osteoarthritis. Based
on 2005 Medical Expenditure Panel Survey data, medical spending on
obesity in the U.S. non-institutional adult population has been
estimated to be $168.4 billion (in 2005 dollars), which was 16.5 percent
of all medical spending that year.
Concern over rising health care costs has predictably encouraged a
growing number of government interventions aimed at reducing the
prevalence of obesity. Examples of such interventions include
restrictions on soda sales at public schools, special taxes imposed on
sodas, disallowing soda sales for food stamp recipients, regulations
requiring restaurants to post caloric content of menu items, bans on
toys offered in children's meals with high levels of calories and
salt, and restrictions on locations of new restaurants.
Researchers typically assume that reduction of obesity prevalence
is desirable without addressing the more fundamental issues of its
optimal level, whether its optimal level has grown over time, and
whether optimal levels are identical for all individuals. In this
article we develop a simple demand/supply framework to model the optimum
level of obesity. We examine these fundamental issues before evaluating
desirability of government interventions. Our conclusions run counter to
conventional wisdom that government has the necessary information to
systematically reduce the prevalence of obesity in line with optimal
levels that differ between individuals.
The Model
Weight gain is caused by an imbalance between calories entering the
body and calories leaving the body. Obesity arises when the intake of
calories sufficiently exceeds the outflow of calories in a manner that
results in a BMI of 30 or higher.
We use the model that Thorkild Sorensen proposed in a 2009 paper to
show the relationships between energy input, energy output, and weight.
If EI is energy input and EO is energy output, then a positive energy
imbalance, EI--EO > 0, results in some energy stored, ES. EC is the
energy used to convert surplus energy into tissue mass. The change in
energy stored is then:
(1) [DELTA]Es / [DELTA]t = EI--(EO + EC)
Changes in energy stored result in changes in body weight. EO is
composed of the basal metabolic rate, BMR, and the energy spent on
physical activity. If PAF is the physical activity factor, then EO can
be expressed as EO = BMR X PAF. The change in energy stored, and hence
weight, can then be expressed as:
(2) [DELTA]ES/[DELTA]t = EI--(BMR X PAF + EC).
Equation (2) identifies factors that affect body weight. Energy
input and physical activity are determined by choices that individuals
make. BMR and EC depend on genetics as well as other factors
including body weight, the amounts of lean and fat tissue, gender, and
age.
[ILLUSTRATION OMITTED]
Energy (i.e., calorie) input and physical activity choices made by
consumers and producers in the economy can be expressed by demand and
supply schedules of weight. Choices determine whether weight gain is
positive, negative, or zero. Weight gain arises from engaging in a mix
of activities that results in intake of calories exceeding outflow of
calories. Eating, drinking, and undertaking sedentary leisure activities
are ways of demanding excess calories and, hence, weight gain. Demand
also represents the marginal benefit schedule of weight as derived from
satisfaction received from consuming another calorie or enjoying an
additional restful moment.
Supply of weight comes from sellers of calories and providers of
less physically active lifestyles. Supply represents the marginal
opportunity cost of weight gain. Costs include those associated with
acquiring and consuming calories, wages that may be lost due to reduced
productivity caused by rising weight, health and medical costs
associated with weight gain, and costs of engaging in more sedentary
lifestyles.
Figure 1 displays equilibrium price and quantity of weight as
determined by the intersection of demand and supply. The equilibrium
quantity represents the optimum level of weight. There is also some rate
of obesity prevalence for society associated with this optimum. This
quite simple model suggests several important issues associated with
obesity.
First, the optimum level of weight changes as demand and supply
vary over time. Factors that cause demand or supply to shift rightward
result in higher optimum levels of weight. Many causes of increased
demand for weight gain have been suggested. These include: increased
consumption of sugar-sweetened beverages, reduction in real prices of
food, urban sprawl, reduced cigarette smoking, less time spent preparing
healthy meals at home, eating more food from restaurants, rising numbers
of food stamp recipients, and food engineering that stimulates the brain
in manners that increase eating.
Factors that have been suggested as increasing supply include
technological change leading to a more sedentary lifestyle, increased
availability of restaurants, a growing lack of grocery stores selling
healthy foods, and agricultural policies that encourage production of
"excess calories."
From the standpoint of economic efficiency, rising obesity reflects
shifts of demand and supply of weight over time. This is surely a
contentious conclusion given that the literature on obesity focuses on
prevention of obesity rather than examining whether its rise is somehow
linked to changes in its efficient level. Nonetheless, marginal benefits
still equal marginal costs, although optimum levels have apparently
increased over time.
Second, optimal weight, and hence optimal prevalence of obesity, is
likely to be different for different individuals. Simple observation
indicates a wide diversity among individuals. Genetics is known to
affect weight. As expressed in Equation 2, genetics can affect weight
through its effects on the basal metabolic rate and energy consumption.
Subgroups of the population that are genetically more predisposed to
obesity experience more weight gain and higher levels of obesity
prevalence than other subgroups for identical levels of energy input and
physical activity factor. Genetic predispositions to obesity are
believed to partially explain why obesity prevalence has risen at
different rates among groups.
[FIGURE 1 OMITTED]
This effect is illustrated in Figure 2, where group B individuals
are more genetically predisposed to weight gain and thus more readily
turn excess calories into additional weight than do individuals in group
A. Marginal costs are also lower for group B because their bodies are
genetically more predisposed to turning excess calories into weight
gain. Population subgroup B will have a higher optimal weight and
obesity prevalence level than group A, even if the demand for weight is
the same for both subgroups. Of course, demand may vary between groups
as well, thus indicating that a "one size fits all" prediction
for optimal weight makes little sense.
[FIGURE 2 OMITTED]
Figure 2 illustrates that setting a goal to achieve the same
obesity prevalence levels for all groups in a society is misguided. If
group B is at weight [q.sub.A], then the marginal benefits of weight
exceed the marginal costs of weight for group B. Group B's optimum
resides at [q.sub.B]. Group B would not be at its optimum level if it
were somehow coerced through government intervention into becoming
slimmer in order to achieve a uniform policy goal of [q.sub.A], Adopting
a "one size fits all" policy goal for weight thus exerts an
"excess burden" on those subgroups that exhibit optimal weight
in excess of government goals.
Healthy People 2010, a federal program to promote healthy living
that was started in 2000, set a goal of achieving a 15 percent obesity
prevalence rate for all categories of adults and a 5 percent obesity
rate for children by 2010. The goals were not achieved by any state of
the United States, yet the same obesity goals are contained in Healthy
People 2020, the successor program. Table 1 exhibits obesity prevalence
by state using data collected by the Behavioral Risk Factor Surveillance
System. Prevalence for 1995 and 2009, and the percentage change over
this period, are displayed. These data are frequently cited in news
reports and by obesity researchers as evidence of an obesity epidemic
that requires immediate and dramatic government intervention.
There is little reason to believe that uniform prevalence goals are
derived from any economic model within a demand and supply framework as
developed in our paper. The fact that one state exhibits higher obesity
prevalence or a larger increase over time does not necessarily or
directly correlate with the degree to which it diverges from optimal
weight. Differences in obesity prevalence and their rates of change
clearly differ substantially by state, but these differences surely
reflect variations in demand and supply across states and over time.
Data from the National Health and Nutrition Examination Survey are
also frequently cited as proof of an obesity epidemic. Data indicate
that about one-third of adults in the United States are obese, with
woman having a slightly higher obesity rate than men. Non-Hispanic
blacks have an obesity prevalence rate that is about 36 percent greater
than Non-Hispanic whites. Hispanics have a prevalence rate about 19
percent greater than non-Hispanic whites. About 17 percent of children
and adolescents aged 2 through 19 years are classified as obese. Again,
these data reflect that different groups of individuals have experienced
different variations in demand and supply over time that do not directly
indicate the degree to which various groups exhibit variations from
optimal weight.
Government Intervention
Presence of externalities is often used to justify government
intervention to reduce obesity. It is often claimed that the obese do
not pay their full health care costs because their above-average medical
costs raise insurance costs for all other insured individuals and
because some portion of their medical costs are publicly funded.
However, obese individuals are known to have shorter life expectancies
than the non-obese and thus their lifetime medical costs are lower than
their slimmer counterparts. Jayanta Bhattacharya and Kate Bundorf, in a
2009Journal of Health Economics paper, also find that obese workers with
employer-sponsored health insurance pay for their greater medical costs
by receiving lower cash wages than are paid to non-obese workers. In
addition, Bhattacharya and Mikko Packalen, in a 2008 paper, argue there
is a positive innovation externality associated with the obese that
roughly matches any negative Medicare-induced health insurance
externality of obesity. They conclude there is no rationale for
"fat taxes" because of the Medicare-induced subsidy of
obesity.
The negative externality argument is thus less than persuasive. In
any case, a more efficient method to account for additional medical
costs of obesity would be to directly charge insurance premiums that
reflect the risk of incurring greater medical costs.
Ignorant and lazy?
Proponents of government intervention also argue that consumers
lack self-control and adequate information on products such as
sugar-sweetened beverages. A 2009 New England Journal of Medicine
article by Kelly Brownell et al. argues:
[M]any persons do not fully appreciate the links between
consumption of these beverages and health consequences; they make
consumption decisions with imperfect information. These decisions
are likely to be further distorted by the extensive marketing
campaigns that advertise the benefits of consumption. A second
failure results from time-inconsistent preferences (i.e., decisions
that provide short-term gratification but long-term harm). This
problem is exacerbated in the case of children and adolescents, who
place a higher value on present satisfaction while more heavily
discounting future consequences.
Such notions are widespread, as evidenced by the constant,
uncritical repetition of that notion by purported experts, policymakers,
social commentators, and the media. But the scientific basis for this
notion is unclear. And even if "excessive" soda consumption is
a product of short-term gratification syndrome, it remains doubtful that
policymakers can somehow overturn this human failing without exerting
unintended adverse effects on others.
Government intervention aimed at lowering tobacco use offers
several examples of unintended effects. A 2004 Health Economics paper by
M. C. Farrelly et al. and a 2006 American Economic Review paper by J.
Adda and F. Cornaglia both indicate that tax hikes on cigarettes have
led smokers to switch to higher-tar and -nicotine brands so that they
can maintain chemical intake levels as they smoke less, to the detriment
of their health. A 2004Journal of Health Economics paper by Shin-Yi Chou
et al. found that higher cigarette prices (stemming from tax hikes),
which reduce smoking, are associated with higher rates of obesity.
Interventions are also likely to impose costs on the non-obese as
well as the obese. For example, taxes imposed on alcohol mostly lower
consumption of light users with little to no effect on heavy drinkers.
Such interventions are also often regressive in nature, with burdens on
the poor higher than the non-poor.
Policymakers also suffer from an information problem themselves
when attempting to levy Pigovian taxes on supposed externalities. The
"correct" tax requires knowledge that certainly does not
exist. A 2010 Obesity Reviews analysis by B. Rokholm et al. of the
obesity epidemic notes that clear evidence on specific causes of the
obesity epidemic is lacking. The above-discussed New England Journal of
Medicine article provides scant hope that "correct" soda taxes
are known; the authors conclude: "As with any public health
intervention, the precise effect of a tax cannot be known until it is
implemented and studied, but research to date suggests that a tax on
sugar-sweetened beverages would have strong positive effects on reducing
consumption." This is wishful thinking given recent evidence that a
one percentage point increase in the tax rate on soda was associated
with a decrease of just 0.003 points in body mass. In other words, large
tax increases are unlikely to exert much effect on population weight.
Evidence indicates that a 58 percent tax on soda, equivalent to the
average federal and state tax on cigarettes, would drop the average body
mass by only 0.16 points--a trivial effect given obesity is defined as a
BMI of at least 30.
Finally, there is little evidence that previous government
intervention has lowered obesity among the poor. A 2004 U.S. Department
of Agriculture review by P. Linz et al. concludes that, despite many
low-income individuals being both obese and recipients of one or more
food assistance programs, the research literature does not show that
programs have lowered obesity. (The review does cite two studies that
find a positive correlation between food stamps and obesity in women,
although neither study tested for a causal connection.) More recently, a
paper by Jay Zagorskya and Patricia Smith reports that the typical
female food stamp participant's BMI is significantly more than
someone with the same socioeconomic characteristics who is not in the
program. For the average American woman, this means an increase in
weight or 5.8 pounds. Good intentions aside, we should be skeptical of
the notion that the expansion of government programs would somehow lower
obesity when research has yet to prove that past programs have not
inadvertently encouraged obesity.
Can "Nudges" Promote Efficient Weight?
Behavioral economists Richard Thaler and Cass Sunstein argue that
policymakers should "nudge" individuals toward efficient
decisions. Because they "nudge" rather than strong-arm or
explicitly prohibit behaviors such as obesity, nudges are labeled
"libertarian paternalism." Thaler and Sunstein believe these
labels allow them to escape negative connotations attached to
paternalism--policies aimed at protecting individuals who are believed
unable to protect themselves. For example, they write, "People
often make poor choices and look back at them with bafflement!"
Behavioral economists thus attempt to correct self-inflicted behaviors
that cause us to exercise too little, eat too much, take on too much
debt, smoke tobacco, drink too much alcohol, and save too little for
retirement.
Rearranging food placements in cafeterias so that healthy foods are
more prevalent and sweets are less so is one nudge favored by behavioral
economists who believe diners have difficulty controlling impulses to
eat unhealthy food. Grocery managers could nudge shoppers by replacing
candy with healthier snacks near checkout stands, since this location is
known to spark impulse buying.
But it is important to recognize differences between
"nudging" by businesses versus governments. Profits motivate
businesses and thus their nudges foster efficiencies, since otherwise
there would be no purpose. For example, rewards for staying in good
health are nudges that are in line with raising profits. The private
marketplace has responded to the increase in obesity by providing
various means of reducing weight gain. Diet sodas and diet foods are
readily available in stores. Sales of Diet Coke overtook those of
Pepsi-Cola for the first time in 2010, making it the number two
carbonated soft drink in the United States. Exercise equipment can be
easily obtained and there appears to be an ample supply of health spas
and gyms. Some businesses now pay their employees to lose weight.
Private industry undertakes much research seeking medicines that will
reduce the costs of achieving weight loss. Unlike government
interventions aimed at weight reduction, the costs of these private
activities are not imposed on the non-obese.
The private sector is thus actively involved within its goal of
maximizing profits. Government and behavioral economists operate under
no such profit constraint and thus efficiency may have little to do with
their motivation. Just as government cannot match supply with demand
better than markets, behavioral economists are unlikely to know how to
successfully nudge us toward greater efficiency even when they believe
they have uncovered irrational behavior associated with weight gain.
There are other downsides to such nudging. Consider food labeling
laws that require restaurants to list their fat and calorie contents.
Sounds good at first, but it might also lead some diners to exercise
less caution and personal judgment simply because "nudgers"
have taken on the responsibility for watching what we eat. Nudges make
it less important to think on our own. Intervention may also make it
appear that the "eat less, exercise more" adage no longer is a
surefire recipe for controlling weight. Substituting government for
personal responsibility rarely works out as planned.
There is also evidence that such nudges do not work so well. A 2009
study by B. Elbel et al. of New York City's 2008 law on posting
calories in restaurant chains examined how menu calorie labels
influenced fast food choices, information on patrons of fast food
restaurants in New York communities was compared with that on patrons in
Newark, N.J., a city without labeling laws. While 28 percent of patrons
in New York said the information influenced their choices, researchers
could not detect a change in calories purchased after the law. A similar
conclusion was reached in a 2011 study by Eric Finkelstein et al. of a
mandatory menu-labeling regulation requiring all restaurant chains with
iS or more locations to disclose calorie information in King County,
Wash. No impact on purchasing behavior was found, as measured by trends
in transactions and calories per transaction.
Finally, it is perhaps obvious, but "libertarian
paternalists" place themselves in the role of fathers guiding the
actions of children. This role is appropriate when exercised by parents
over children, but it remains questionable to award behavioral
economists this same role over adults.
Conclusion
There is no question that the prevalence of obesity has risen
dramatically in recent years. Researchers typically assume its reduction
is desirable without addressing the more fundamental issue of its
optimal level. Our paper suggests optimal levels of obesity have
increased over time and that optimal levels are not identical for all
individuals or groups. Meanwhile, the federal government has set a goal
of 15 percent for adult prevalence and 5 percent for child prevalence.
Adopting a "one size fits all" policy goal for weight thus
exerts an "excess burden" on those subgroups that exhibit
optimal weight gain in excess of government goals.
There is little evidence that obesity stems from some sort of
market failure. And even if a negative externality exists, government
does not command the required expertise to systematically reduce its
prevalence toward optimal levels. Placing identical goals for obesity
rate reduction across all individuals also exerts excess burdens on
those individuals who differ from government's mandated
"ideal" weight. There is also no reason to believe that
"ideal" weight bears any correspondence to optimal weight.
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BY MICHAEL L. MARLOW AND ALDEN go SHIERS
California Polytechnic State University
MICHAEL L. MARLOW and ALDEN F. SHIERS are professors of economics
at California Polytechnic State University in San Luis Obispo.
TABLE 1
Changing Obesity Rates
By state, for years 1995 and 2009
%
1995 2009 Change
Alabama 19 32 69
Alaska 20 25 28
Arizona 13 26 95
Arkansas 18 32 80
California 15 26 69
Colorado 10 19 88
Connecticut 13 21 68
Delaware 17 28 61
Florida 17 27 54
Georgia 13 28 108
Hawaii 11 23 112
Idaho 14 25 77
Illinois 17 27 64
Indiana 20 30 49
Iowa 18 29 63
Kansas 16 29 81
Kentucky 17 32 92
Louisiana 18 34 92
Maine 14 26 87
Maryland 16 27 64
Massachusetts 12 22 86
Michigan 18 30 66
Minnesota 15 25 66
Mississippi 20 35 82
Missouri 19 31 62
Montana 13 24 77
Nebraska 16 28 72
Nevada 13 26 98
New Hampshire 15 26 74
New Jersey 15 24 65
New Mexico 13 26 97
New York 14 25 77
North Carolina 17 30 78
North Dakota 16 28 73
Ohio 18 30 70
Oklahoma 14 32 137
Oregon 15 24 55
Pennsylvania 16 28 71
Rhode Island 13 25 89
South Carolina 17 30 80
South Dakota 14 30 118
Tennessee 18 33 79
Texas 16 30 86
Utah 15 24 58
Vermont 15 23 60
Virginia 16 26 62
Washington 14 27 94
West Virginia 18 32 73
Wisconsin 16 29 83
Wyoming 14 25 178
Source. BFRSS data Note: Utah's data begin in 1998.