Don't blame fast food ads for fat kids

December 18, 2005

This exchange was posted on the Becker-Posner blog, maintained by University of Chicago economist Gary Becker and U.S. Appellate Court Judge Richard Posner.

BY GARY BECKER

A report this month from the Institute of Medicine attributed a significant part of the increasing obesity among teenagers and young children to television advertising of foods and drinks with high sugar and fat content. It recommended that companies work with scientists and others to reformulate their products and ads. Some persons at the Institute of Medicine went further and raised the prospect of possible congressional regulation of TV ads oriented toward children, even though, as we will see, the evidence provided by the report is weak and not persuasive.

Before examining this evidence, obesity of children should be placed in perspective. Obesity has increased for most of the past 25 years among all groups and at all ages, including the elderly. Presumably, advertising of goods like Big Macs and Coca-Cola has less influence over the consumption by adults, particularly by older men and women. Moreover, obesity has grown in all developed countries, even those with much sharper controls over advertising.

Obesity in the United States and elsewhere started increasing particularly rapidly in the early 1980s. Studies by economists, especially those by Richard Posner and Tomas Philipson, Jesse Shapiro, David Cutler, and Edward Glaeser and Fernando Wilson, sifted through many factors that might be responsible. The two most important factors highlighted by these studies are the lower effective price of fat due to the development of efficient fast food outlets, and for teenagers, a more sedentary use of leisure time due to the growth in time spent with computers, browsing the Internet and playing video games.

There is no doubt that McDonald's and other companies tend to increase their revenues when they raise advertising budgets -- otherwise, companies would not spend so much on advertising. But most of the increase in sales to a company when it advertises more tends to come at the expense of sales by competitors. So if Wendy's increases its advertising, sales by McDonald's and other competitors would tend to fall. To the extent that advertising mainly redistributes customers among competitors, eliminating advertising of fast foods or sugary beverages through regulation would have relatively little effect on overall demand.

As far as I could tell from examining the complex report by the Institute of Medicine, it did not include any studies (presumably because none are available) that directly look at the effects of advertising by fast food and beverage companies on overall consumption of these goods by teenagers and younger children. Instead, virtually all the studies available to them examine effects on children's weight of greater or lesser exposure to television.

The problem with such studies, even in the very few that are carefully designed, is that they cannot separate the effect on weight of greater exposure to advertising through watching more television from the effect on the propensity to gain weight from other activities correlated with watching TV, such as more sedentary behavior, or eating snacks while watching. The authors of the report recognize this serious shortcoming. ...

A Ph.D. study in progress by Fernando Wilson at the University of Chicago shows that the big increase since 1980 in children's use of time was not toward greater television viewing, for this remained rather constant during the past 25 years -- and maybe has declined slightly. What increased by a lot was time spent with computers and video games, at the expense of time spent at sports and other more active activities. Since advertising on computers and video games has been far less important than advertising on television, it is hard to see how the growth in obesity during the past 25 years could be explained at all by advertising toward children, unless TV advertising became much more effective than it had been.

Advertisements clearly influence the demand for different goods, but they also are sensitive to the desires of consumers. At the same time that consumers have been gaining a lot of weight, they have become more conscious about eating oats and other high fiber foods, about the vitamins added to different cereals, about the sugar content of foods and beverages, and eating other healthy foods. A study a few years ago by Pauline Ippolito and colleagues at the Federal Trade Commission found that when some parents began to want healthier cereals for their children, companies were quick to respond with new and healthier cereal brands. As soon as they were allowed to do so, they also began to advertise the healthy advantages of oat cereals and other products with high fiber content or with many vitamin supplements.

If children nowadays are heavier because they are less physically active, or because their parents find fast food cheap and convenient, it is difficult to see how advertising by food and beverage companies is to blame. And despite the hype the study received, the Institute of Medicine's report on obesity and advertising did not present convincing evidence that television advertising oriented toward children has been responsible for the increase in children's obesity during the past quarter century.

And plenty of other reasons explain obesity

BY RICHARD POSNER

Iagree with everything Becker says, but will add a few points. A more effective measure to reduce youthful obesity might be to ban the sale or service of soft drinks and other high-calorie foods in schools, or even to tax such foods heavily. Of course such measures are, from an economic standpoint, justifiable only if the growth in obesity represents a market failure. "Obesity'' is a loaded term; it is the name we give to being too fat. It is possible that being fatter than doctors think healthy is optimal, just as it is possible that eating a diet that deviates from what doctors would prescribe for someone who aspires to live to be 100 is optimal. People trade off health costs for benefits in other currencies; food high in calories tends to be both delicious and cheap. The health effects of being overweight are highly publicized. In addition, in our society fat people are generally considered much less attractive than thin people, and there is a considerable premium in the job market for attractive people, partly because coworkers and supervisors obtain utility from associating with attractive people, partly because being attractive enhances self-confidence, self-esteem and social skills.

Given all the negatives of being overweight, it is difficult to believe that obese people have underestimated the costs of being overweight.

But the huge diet industry, and the growing resort of the obese to dangerous abdominal surgery (gastric-bypass or bariatric surgery -- "stomach stapling'') are contrary evidence. It is much easier to avoid gaining weight than to lose weight, and while some people have an unfortunate biology that creates irresistible cravings for excessive amounts of fat, the obesity problem seems much more widespread. If the cause were biological, the well-documented increase in obesity over the last several decades would be inexplicable.

A factor that the economist Tomas Philipson and I have emphasized is the increasingly sedentary character of activity in both work and the home, as a result of the shift from manufacturing to services and the growth of labor-saving devices.

In the old days the average individual, male or female, was in effect "paid'' to expend calories, the payment taking the form of pecuniary income for strenuous work in the workplace or nonpecuniary income from household work. Today one has to pay to expend calories by joining a gym or otherwise taking time from work or leisure to exercise. As Becker points out, the trend has affected children and teenagers because of the growing substitution of sedentary leisure activities for athletics. Strikingly, because of concerns over liability, many schools no longer make physical education mandatory.

Still another factor may be that as more and more people become overweight, the stigma of obesity diminishes. When I was a kid, fat kids were rare, and were teased. The more fat kids there are, the more normative their appearance becomes. In addition, if parents are fat, the credibility of their lecturing their children on the importance of remaining thin is undermined. "Do as I say, not as I do,'' is not a very effective means of persuasion.

Political correctness may even be a factor. Jokes at the expense of fat people used to be a staple of comedy (remember Abbott and Costello?). No more. Political correctness has reduced the use of ridicule to enforce social norms.

All this said, the case for public intervention to reduce obesity is uncertain. The main costs of obesity, in increased illness and disability, are borne by the obese themselves, which greatly weakens the economic case for intervention.

True, the obese are able to shift some of their medical and disability costs to others through the Medicaid, Medicare, and Social Security disability programs, which are subsidized health and disability programs that do not limit benefits to the obese even though the obese experience increased illness and disability as a consequence of their obesity. Yet the benefits of preventive health can be exaggerated. It increases the percentage of the elderly in the population, and the elderly are very heavy demanders of expensive -- and subsidized -- health care and pensions.