The Economics of Taking on Obesity

Aug 19, 2016

With one in three American adults now classified as obese, the search is on for new explanations.  Health professionals have blamed excess consumption of sugar and fat coupled with a lack of exercise.  Now, an economist at the University of Virginia is speaking out.

Christopher Ruhm is a professor of public policy and economics at UVA.  He’s also a trim 167 pounds, and he thinks America’s weight problem might be tied to the easy availability of high calorie food.  There is a correlation, for example, between rates of obesity in a community and the number of restaurants or super stores per capita.

University of Virginia Professor of Public Policy and Economics Christopher Ruhm
Credit University of Virginia Frank Batten School of Leadership and Public Policy

“If you go to one of these stores, often in the front you have the heavily processed food, maybe in large sizes, cheaply. It’s just really easy to get energy dense food – that’s high calorie food.”

And it turns out these foods are often the least expensive, in part because of government subsidies for their ingredients.

“Some of our subsidies for things like corn and wheat versus much less for tomatoes and apples.”

In addition to adjusting government subsidies, Ruhm says grocery stores and restaurants could do their part to treat an epidemic of obesity by using so-called nudges – small things that encourage healthy choices.  Ruhm cites the example of a cafeteria offering desserts.

“What we know is if you put fruit in the front and cake in the back, it’ll to a small effect change our decision.  If I really want cake, I just reach over and get it, but even that small little cost of having to reach over seems to make a difference.”

Another example -- putting calorie counts on menus.  Ruhm and his colleagues at Georgia State may have other ideas as they begin to study how we make the decisions that make us fat.  Their findings to date are published in the Southern Economic Journal.