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Negative Externalities of Obesity

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Lira Lao

on 8 May 2015

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Transcript of Negative Externalities of Obesity

The lack of nutrients in the food makes people feel chronically fatigued and cannot complete daily tasks
Fast food does not have enough nutrition to maintain a healthy diet
The sugar in the drinks and food causes a momentarily rush of energy and then a depletion of energy that makes the consumer feel grumpy and crave sugar again
This overuse of bags, wrappers, napkins, straws, boxes, Styrofoam containers, and plastic-ware is the largest source of urban litter in the United States.
Among the litter, Styrofoam is the worst because it takes at least a million or more years to decompose in a landfill
Fast food places use excessive amounts of packaging
Fast food impacts on other areas
Fast food restaurants purchase animal products from factory farms that practice animal cruelty.
Chickens, cows, and pigs raised to make fast food are often crammed in small cages to save space.
Lacks Vitamin A and Vitamin C which is important for energy, but the normal burger does not have these
The average American got 11.3 percent of his calories from fast foods
When a person has too much fast food, their calorie intake gets higher while their nutrient level gets lower
Best Fast Food Chains
Chemicals and preservatives
Many animals are fed drugs to fatten them faster.
Once the animals reach to a certain weight, they are quickly slaughtered and sold to fast food restaurants.
What is in the Food
Consumers are constantly underestimating the calories in fast foods
This is the scary statistics of the amount of obese and unhealthy people living in U.S.A
1 in every 3 children are obese from the trans fatty acids in fast food
34.9% of American adults are obese and these numbers are increasing every year
Panera Bread is considered the #1 healthiest fast food chain in America. Panera Bread is highly recommended for its Kids' Menu.
The number of obese people in America has doubled in the last 30 years amongst children and quadrupled amongst adults
Jason's Deli is considered the second heathiest fast food chain. About one-fifth of of all Jason's Deli ingredients are organic
Every year, millions of trees are cut down to produce fast food packaging.
Fast food Styrofoam drifts into the ocean, which results in the release of toxic chemicals in styrofoam. Therefore, marine life is harmed by these chemicals.
The healthiest fast food chains in Ameica
Au Bon Pain provides an on site nutritional site
Chemicals and Preservatives
By: Lira Lao, Macy Sung, Sia Li and Zac Albert
Cochineal extract is a approved artificial dye that is derived from a small South American cactus bug.
Fast food workers obtain countless injuries
Obesity has become an epidemic amongst the people of America because of the amounts of unhealthy food we intake in a single day
Butylated hydroxyanisole (BHA) is used to preserve some cereals, chewing gum, and potato chips. The National of Health believe that BHA can be expected to be identified as a carcinagen in the future.
What Fast Food Does to the Human Body
Fast food causes diseases such as obesity and diabetes
Less then 1 percent of kids' meals fit the recommended nutrition standards- 33 out of 5,247
Fast food does not contain good enough products
Less than one-quarter of restaurants' regular menu items qualified as nutritious options for teens
Silicon dioxide is made up of shells of tiny algae. You might also recognize it as sand. It is used in dry coffee creamer, dried soups and other powdery foods. It is also used as an insect repellent, removing the oily film that covers an insect's body, causing them to dry out and die.
The high amount of trans fats in the food leads to obesity and later on diabetes
This regular diet of unhealthy eating leads to the higher risk of a heart attack
Teen workers are more likely to be injured on the job in fast food restaurants than other restaurants in the industry.
www. laborcenter.berkeley.edu
Just by eating fast food twice a week, you can increase the possibility of getting type 2 diabetes
The cholesterol intake from these fast food can lead to high blood pressure too
What is actually in the food will appear horrifying
63% of teen injuries in restaurant industry occured in fast food restaurants.
Fast food workers usually work for a low wage with no medical benefits from their employers
Fast food workers suffer one of the highest injury rates in the employment of the United States
Possible government solutions:
government should impose a tax equal to the marginal external cost (or grant a subsidy that is equal to the marginal external benefit)

this is favorable because it will still allow the market to operate and it also has the flexibility of being adjustable
Market Failure

Negative Externalities
S (msc=mpc)
D (mpb)
D1 (msb)

Positive Externality of Obesity
Negative Externality
Positive Externality
Market Failure
How obesity leads to market failure
Government solution
Negative externality of Obesity
Health care: Demand increases
Price level increases (more expensive)
Insurance: demand increases, spend more $ on it.
people who are around obese individuals: consume more
causes more obesity and disease.
cure expense increases
Hospital: demand
A situation in which the allocation of goods and services is socially inefficient.
There exists another conceivable outcome where an individual may be made better-off without making someone else worse-off.
D2 (mpb)
Positive Externality
price level
earn more $
Insurance: demand
price level
earn more $
S2 (msc)
S (mpc)
D (msb)
The technological change provides a natural interpretation of the long-run growth in obesity, that it predicts that the effect of income on obesity changes from positive to negative with economic development, and that it implies that technological change may not continue to raise weight.

How obesity leads to market failure:
Thank you for your time
Possible government solutions :
create a fat-tax (Denmark)

government funded obesity educational and/or obesity prevention programs

vegetable subsidies
obesity-related medical costs (economic costs of US$117b per year)

obese consume significantly more medical resource than the non-obese

lost earnings from employment
Abdus, Salam, and John Cawley. "Simulating the Impact of a “Fat Tax” on Body Weight." Department of Policy Analysis and Management Cornell University, Sept. 2008. Web.
McCormick, B., and I. Stone. "Economic costs of obesity and the case for government intervention." Obesity reviews 8.s1 (2007): 161-164.
Rocha, Cecilia. "Food insecurity as market failure: A contribution from economics." Journal of Hunger & Environmental Nutrition 1.4 (2007): 5-22.
Southworth, L. (2009). The Skinny on a Fat Tax: Obesity and Microeconomics. pp, 11(1).
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