Ohio's lawmakers are pondering ways to help their constituents, young and old, get into better shape and avoid weighty problems in the future. One way would be to see that young people, especially, are served healthy food.
State support for programs that grow fresh fruit and vegetables in urban garden plots for consumption from urban plates would be especially helpful. So would banning soft drinks from schools and a return to state-mandated physical education.
Individuals are choosing to do what is best for them. What are possible market failures? These will occur if individuals choosing to eat junk food are not considering the full repercussions of their actions. Likely, monopolies on junk food or other sources of imperfect information are not problems for the obese--they are inundated with health information every day. Are there externalities to being fat? There may be two negative externalities: the first, that obese people may cause negative externalities to people who see them on the street, the second is that obese people may cost thin people more money by receiving benefits from government health programs. We'll assume the former isn't a serious problem, and entertain the second. Suppose obesity has this negative externality. What is the best solution?
The article appears to favor a subsidy on healthy food, revenue for which must be generated from a tax on another good, creating two possible deadweight losses--one from the tax, the other from the subsidy.
The efficient solution to the second would seem to be a Coaseian solution--to privatize the problem. A Pigouvian tax on unhealthy foods falls inefficiently on the obese and the fit. A Coaseian fix, declaring that individual health problems brought on by obesity are to be paid for by the individuals causing the externality (the obese), would be more appropriate.
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