Question

Can obesity epidemic be regarded as a negative externality? Explain.

Answer 1

Below are the reasons why obesity epidemic is regarded as a negative externality.

Expected health care expenditures are higher for obese individuals than for normal weight individuals. If rational individuals pay he full costs of their decisions about food intake and exercise, economists, policy makers, and public health officials should treat the obesity epidemic as a matter of indifference.

Since the obese consume significantly more medical resources than the non-obese, but pay the same health insurance premiums, they impose a negative externality on normal weight individuals in their insurance pool.

The average American got 11.3 percent of his calories from fast foods, Many animals are fed drugs to fatten them faster. Fast food workers usually work for a low wage with no medical benefits from their employers.

Just by eating fast food twice a week, you can increase the possibility of getting type 2 diabetes. Fast food workers suffer one of the highest injury rates in the employment of the United States. Teen workers are more likely to be injured on the job in fast food restaurants than other restaurants in the industry.

Every year, millions of trees are cut down to produce fast food packaging. 34.9% of American adults are obese and these numbers are increasing every year.

The lack of nutrients in the food makes people feel chronically fatigued and cannot complete daily tasks, government should impose a tax equal to the marginal external cost (or grant a subsidy that is equal to the marginal external benefit), this is favorable because it will still allow the market to operate and it also has the flexibility of being adjustable