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Monday, August 4, 2008

More on economics of transfat and fast food

I was thinking some more about the posts made by Chicago school economist Gary Becker and Judge Posner basically arguing that trans fat and fast food regulation aren't really that important and that disclosure of nutritional data by fast food chains isn't really beneficial.

This thought process is typical of followers of the Chicago school (read: conservative economics - from Posner):

"people concerned about their weight have the incentive and ability to inform themselves about the number of calories that they consume."

I started thinking more about this when I came across a report from the non-profit org, Center for Science and the Public Interest, just published, entitled: "Kid's Meals: Obesity on the Menu." It surveyed about 2 dozen fast food chains and found that of the the typical kid's meals in fast food chains well exceeds one third of a child's daily allowance of calories and fat. In fact, a whopping 93% of meals surveyed exceeded the calories coded as 'healthy.'

According to their data, all possible combination of kid's meals at KFC, Sonic, Jack-in-the-box, Chick-fil-A, and Taco Bell exceed 430 calories. As you might imagine, Subway has the most healthy meals: only 1/3 of their meals exceed 430 calories.

Given all this, and the fact that other studies show that nearly 20% of all expenditure of 'bad' food marketing is aimed at children, and given the potential heart disease, high cholesterol, diabetes, and just general poor health habits that this entire picture creates in our youth, it just blows my mind that anyone can suggest that the simple act of making fast food chains post calories per meal (not try to hide it on some obscure placard by their bathrooms, or embedded 20 clicks into their website) is somehow not worth it.

The cost to these chains of adding this to their posted menus would be next to nothing. The real cost would be in the lost revenue. Currently information is asymmetric: restaurants know they are slowly killing our kids. But kids and parents don't - they are not machines and cannot spend time trying to find hidden nutritional signs. Information is scarce. I'm not a parent, but if I was and if I saw that my child was eating nearly an entire day's worth of calories in one sitting, I would think twice before spending my money there. But, that is the point isn't it? Let people realize they need to eat healthier which will enable companies to realize they can make better profits by shifting to healthier menus.

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