Wednesday, June 6, 2012

Bye bye to supersized beverages in NYC

There is an obesity epidemic in the US.  There are numerous causes, including sedentary lifestyles, more meals eaten away from home, creative innovations that make food fatter and tastier (why not a Doritos shell on my taco?), and lower prices for processed foods.  

How to turn things around?  One would do well to look at how we have dealt with tobacco products.  Through a combination of taxation and education, the percentage of people who smoke in the US has dropped from 44 to 21 percent over the last 60 years.   Textbook economics would indicate that a calorie tax combined with exercise subsidies would be the way to go.  Food retailers could make information about caloric content more accessible so that consumers could make more informed choices.  Examples: Panera Bread posts calories on menus; Cheesecake Factory introduced a Skinnylicious menu with all entrees below 590 calories.

How not to do it?  Consider NYC Mayor Michael Bloomberg’s proposed ban on large sugary drinks.  It fails every conceivable benchmark of economic rationality.  It will be hard to enforce; anyone who wants 32 ounces of soda will still have plenty of options, albeit with slightly increased transactions costs.  It singles out beverages while ignoring chips, ice cream, ribs and all the other goodies that help us gain weight faster.  A tax on large drinks would do just as much to discourage their consumption and, as a bonus, give the good mayor more money to serve his constituents.  No wonder a food industry group ran a full-page ad in NYT depicting Mayor Bloomberg as Nanny Bloomberg, with the text asking "What's next? Limits on the width of a pizza slice, size of a hamburger, or amount of cream cheese on your bagel?"

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