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Childhood Obesity Macro & Microeconomic Linkages

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Amy Teller

on 26 January 2018

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Transcript of Childhood Obesity Macro & Microeconomic Linkages

Macro and Micro Economic
Analysis of Childhood Obesity

Macroeconomic
Causal Factors
Macroeconomic
Solutions
Fiscal policy measures
Direct taxing on unhealthy food & beverages
Increased subsidies on fresh fruits & vegetables
Influence price levels could shift consumer demand toward healthier foods
Government funding for preventative policy levers and public health initiatives

The Problem:
Interesting documentary
on the role of government
and large corporations
on food production/obesity
Solutions
Conclusion...
Childhood obesity is a major global public health problem
Supply and Demand Causal Factors:
• Decreasing food prices,
• Driven by an increase in consumer demand for fast, cheap food
• Increase in aggregate economy and subsequent increases in income
Economic Consequences
• Increases in collective health care costs and productivity
Economic Approach to Solutions
• Various fiscal policies and government interventions may help to ameliorate this trend

Examining this wicked problem from an economic perspective helps to uncover contributing factors, calculate long run consequences, and analyze intervention resources that present the most benefit per dollar.
source PR Newswire
retrieved from
Underlying Supply, Demand, & Production Function Factors in the Causes, Consequences,
& Solutions to this Wicked Problem

Economic Causal
Factors

Childhood Obesity
is a Global Issue
Macroeconomic
Consequences
Increased health-care costs
= drain on taxpayers

Microeconomic
Causal Factors
Increase in consumer demand for fast, cheap food
To minimize production costs food manufacturers use cheaper inputs (less expensive ingredients) such as High Fructose Corn Syrup
Improvements in production technology = increases in marginal productivity and decreases in food prices
Law of Demand: as price decreases, quantity demanded increases
Surplus supply of ingredients in fattening foods
Substitution of less-expensive ingredients to reduce food production costs
Advances in production technology
Decline in the real price of food
Consumer demand for fast, cheap,
tasty food
Rises in the aggregate economy and personal income
= Excess consumption of calorific products “above what would occur in a truly competitive market” (Finkelstein, 2010)
Microeconomic
Consequences
• Over the past few decades, childhood obesity has quickly developed into a major public health problem in the U.S. and increasingly worldwide.

• In 2012, more than 1/3 of children and adolescents were overweight or obese (CDC, 2015).

• Similar trends can be seen on a global scale, with nearly half a billion overweight or obese people worldwide (Hammond, 2009).

Import restrictions on sugar increased sugar prices

Government subsidies on corn and soy
surplus supply driving down the price of key ingredients in calorically dense foods

Rise in the aggregate economy

Summary
Obesity
Long-Run
Economic
Consequences
Decline in marginal productivity of the future labor market
Obesity linked to cognitive and skill-acquisition delays
Increased sick leave
Possible increased production costs for all goods and services

Microeconomic Solution
Linkages
Production function analysis of policies and prevention programs to determine cost effectiveness and "biggest bang for the buck"
Full transcript