The literature on the economic causes of and policy responses to obesity1

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This paper discusses economic perspectives on obesity, summarizes the economic literature and outlines potential policy responses. The paper provides the most up-to-date review of the literature. The literature illustrates the potential role of informational market failures and the dichotomy between the private and social costs of obesity. Market failures can act to provide a rationale for government intervention. Suggested factors for explaining the increase in the prevalence of obesity are discussed as relating to imperfect information, lifestyle changes and technology changes. Some of the potential remedial policies that are being debated in the literature include applying Pigouvian taxes, labelling regulation and advertising limitations.

Keywords: Obesity; childhood; labelling; market failure; welfare

Document Type: Research Article


Affiliations: Food Standards Agency, London, UK

Publication date: September 1, 2005

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