ArticlesAn economic framework for understanding physical activity and eating behaviors
Introduction
Discretionary activities (e.g., diet, physical activity, smoking, and excessive alcohol consumption) can have a major impact on chronic diseases such as heart disease, diabetes, obesity, asthma, and depression. However, exhorting individuals to exercise more, eat in a healthier fashion, lose weight, stop smoking, or drink responsibly seems to have little effect in isolation. Why are well-intentioned public health recommendations not embraced more enthusiastically? What does it take to change people's behavior—and is it a good idea to even try? Economic principles can help answer these questions and provide insight into why the prevalence of obesity rose recently and how this trend may be addressed.
Researchers increasingly recognize that changes in dietary patterns and physical activity are driven by changes in the incentives that people face, rather than by sudden changes in genetics or willpower.1, 2, 3 However, many explanations for the rise in obesity have been advanced, such as increased television viewing, higher consumption of fast food, the design of suburban housing developments, and rising portion sizes. Likewise, a variety of local, state, and federal policies have been proposed to counter the rise in obesity, such as more school-based physical education, restrictions on food advertising, and taxes on snack foods. Much of this discussion has occurred ad hoc, in the absence of a theoretical framework to help understand why obesity may have risen, what would justify a policy response, and what responses are likely to be most effective.
To fill this void, this paper offers an economic framework for understanding and addressing the recent rise in obesity. Economics is useful for this purpose because it is the study of how people allocate their scarce resources of time and money in order to maximize their lifetime happiness. Health is only one factor that contributes to people's happiness. Sometimes people are willing to sacrifice health in exchange for other things that they value.
Subsequent papers by Sturm4 and Drewnowski5 apply this economic framework to assess how economic changes related to diet and physical activity may have contributed to the rise in the prevalence of obesity. Ensuing papers by Pratt et al.6 and Finkelstein et al.7 assess the extent to which some interventions proposed to address obesity satisfy the economic criteria for intervening in markets. This paper is written from the economic perspective but economics, like all disciplines, has limitations, and obesity research and policy require input from all relevant fields.
Section snippets
The economic framework
Public health and economics differ in two important ways. The first regards the nature of the questions they ask. Public health focuses on optimizing health outcomes by asking the question: “What should individuals do to improve their health or lengthen their life span?” In contrast, economics asks how people allocate their scarce resources of money and time in order to maximize their lifetime happiness; in the argot of economists, people maximize the present discounted value of their lifetime
Utility maximization and SLOTH model of time allocation
The economic framework assumes that individuals seek to maximize their utility (i.e., happiness or welfare) subject to the constraints of time, budget, and biology. Specifically, people seek to maximize the following utility function: The arguments S, L, O, T, and H are vectors of variables that represent the number of hours spent in different pursuits; we call this decomposition of time the SLOTH model. S represents time spent sleeping, L time
Economic and non-economic rationales for interventions
If individuals were perfectly rational, if the production and consumption of goods imposed no costs on others in society, if information were perfectly accurate and readily available, and if all markets were perfectly competitive, then the operation of free markets would maximize social welfare. However, when these strong assumptions are violated, economists recommend policy interventions to reduce the efficiency loss caused by market failures. Importantly, without a market failure, there is no
Summary and conclusion
In light of the recent rise in the prevalence of obesity, there is a need to better understand both the economic contributors to the rise in obesity and the economic rationales for intervening in these markets for the purpose of increasing physical activity or decreasing weight. We present an economic framework illustrating the short- and long-term costs and benefits of calorie consumption, time allocation, and weight. We offer the SLOTH model of time allocation in order to categorize the ways
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