The rise in obesity across the Atlantic: an economic perspective

Abstract

We provide comparable evidence on the patterns and trends in obesity across the Atlantic and analyse whether there are economic rationales for public intervention to control obesity. We supply new evidence on such rationales taking into account equity issues as well as efficiency considerations, which are organized around the following categories of market failures: productive inefficiencies, lack of information or rationality and health insurance externalities. We argue that there is support for intervention targeted towards the young on equity grounds. While the evidence that the allocation of resources is (or will be) significantly distorted by the rise in obesity is less clear-cut, there are signs that this is the case due to time inconsistent preferences and because of the resilience of product and labour market imperfections, especially in some European countries.