Big fat budget priority

Marketplace Staff Dec 4, 2006

SUSAN LEE: How much you weighed used to be a private matter. If you wanted to look like a tub of lard, that was pretty much your business. But now fat is a public issue.

KAI RYSSDAL: That’s economist Susan Lee.

LEE: From an economic standpoint, government interference in the fat market makes sense. Fat people have lots more health problems than skinny ones — more Type 2 diabetes, heart disease and hypertension.

One way to reduce the number of fat adults is, of course, to prevent kids from becoming obese. And, yes, surveys show that taxpayers are willing to pay the extra tariff to provide low-fat school lunches. Or to expand school athletic programs. Or to provide free treats of fruit and vegetables.

But speaking as an economist, the question is: How much, exactly, are people willing to spend?

Well, now we have an answer of sorts. A study done at Cornell University asked New York State residents how much they were willing to pay to cut childhood obesity by half.

The answer was very, very interesting. It turns out that New York staters are happy to pony up almost $700 million a year — or almost $50 dollars each — to cut the number of fat kids by half.

And here’s the interesting bit: the $700 million to reduce childhood obesity is more than double the expected benefits in lower Medicare and Medicaid bills. In other words, taxpayers are willing to pay double for what they would save in the future.

One explanation is that people wildly overestimate the cost of eliminating childhood obesity. Or they grossly overestimate the amount of savings in lower health care costs. Or maybe, as the study argues, they are driven by the spirit of altruism.

Altruism doesn’t interest most economists, but I think of it as a way to monetize the biblical injunction to love thy neighbor as thyself.

Why else would people be willing to pay extra to make sure that no kid looks like a tub of lard. That, my friends, comes really close to putting your money where your mouth is.

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