Saturday, May 7, 2011

The proliferation of WMB

Deep inside the dim-lit basements of fraternity houses across America unnoticed innovation is going on. Breakthroughs in the field of fluid dynamics are made every Friday and Saturday night. What are being developed in these laboratories that reek of stale beer, where lab coats are traded for seersucker pants and safety glasses replaced with Wayfarers? Weapons of Mass Binging (WMB). WMB have been proliferated throughout the Anglosphere, raising questions about this seemingly new phenomena’s impact on public health. But, most importantly, begs the question, how can it be stopped?

The National Institute on Alcohol Abuse and Alcoholism states that binge drinking, a pattern of drinking that raises blood alcohol concentration to .08 grams, happens when men consume 5 or more drinks and woman consume 4 or more drinks, in about 2 hours.[i] Armed with WMB this can occur in less than 20 minutes. The AK-47 of the house party has undoubtedly become the funnel or beer bong. This harbinger of inebriety allows for almost instantaneous intoxication. (In what has to be one of my favorite videos, The Onion conducts a “study” showing that the majority of Americans get most of their exercise while intoxicated.)

While the UK, U.S. and Australia’s overall consumption of alcohol is typically lower than continental Europe’s, heavy episodic drinking is on the rise. Many different approaches have been taken to combat what is now endemic on college campuses. The U.S. experimented with the most draconian approach with prohibition in the 20's and Australia instituted a measure that closed pubs at 6pm. The beer bong and shot ski (my favorite WMB) may be contemporary innovations but over consumption of alcohol is hardly new.

What can be done to stop binge drinking which should in turn decrease bar fights, vandalism and 4am breakups?

Authorities could begin to round up and destroy WMB. While this would be a novel attempt to tackle the issue, I doubt it would have any measurable impact on binge drinking rates and would be nearly impossible to enforce since your standard WMB can be assembled with the help of your always-knowledgeable Home Depot employee.

Many states, universities and cities in the U.S. have flirted with zero-tolerance policies. These policies typically include a hefty fine in the thousands, a night in the drunk tank and/or some form of court ordered community service for violations such as public intoxication, public urination or open container. Many cities in my home state of New Jersey have adopted legislation banning drinking games that are within view of the street and the recent St. Patrick’s Day parade in Hoboken attracted a media blitz when thousands took to the streets in drunken revelry, many of whom now have to take out a loan to pay off a fine worth the equivalent of a paycheck.

The philosophy behind such severe punishment is deterrence. The problem with deterrence theory is that it is always difficult to assess its impact. It is commonly cited by proponents of the death penalty, but all research has shown that there is no evidence that the threat of execution reduces the murder rate more than life in prison.

We could easily stop the over consumption of alcohol by having police officers immediately execute offenders on the street. Erecting a gallows during celebrations and conducting public hangings would also do the trick. This would end everything from drunk driving to parking in handicap spots, but I doubt anyone would agree to this.

Harsh punishments such as zero-tolerance policies are just as ridiculous as summary executions on college campuses. Most people adhere to one of two beliefs regarding retribution: it should be equal or proportional. Laws regarding public intoxication and possession of controlled substances fail to conform to either of these principles. How can retribution fit the “eye for an eye” criterion for someone who drinks too much and stumbles out of a bar with an open beer in hand? The same is true for someone who uses heroin. You cannot enact a retributive punishment that fits the crime.

Defenders of drug laws will claim that we have established proportional laws, where the punishment fits the crime. For example, parking violations are met with a slap on the wrist fine. But, a person who is arrested for public intoxication often times has to carry this conviction around with him/her for the rest of their life. It may even disqualify them from future jobs. This is hardly proportional.

Substance abuse laws are where my views align almost perfectly with libertarians (one day I will write a post attempting to summarize my beliefs that will undoubtedly be marred with hypocritical inconsistencies).  If you are selling alcohol to children, drinking too much and assaulting other individuals or spray painting a stop sign, there is a right for retribution because there is a victim. Face planting on a side walk because you had 20 beers has only one victim, yourself.

On to possible solutions.

Personal liberty should never be limited (if possible, often times a liberty/security trade-off exists). The government’s role is to internalize externalities and it can often time do this by providing or changing incentives. It can employ incentives that are not coercive and do not unjustifiably punish individuals through taxes and/or regulation.

How did I just align my beliefs with libertarianism and advocate government intervention? Because the social cost that binge drinking has on society is a negative externality. The fact you zone out at work or skip your physics course the day after a bender imposes not only a personal cost, but a cost on society through decreased productivity. In this case, a tax can provide you with the necessary foresight to make an educated decision. If you value the utility associated with a binge, then you pay for the loss of productivity you imposed on society through the tax.

It is difficult to aggregate the social cost or negative externality binge drinking produces, if there is any. A 2010 study by Joseph Sabia finds that when individual effects, such as psychological well-being, are controlled for, binge drinking has a statistically insignificant effect on academic performance.  First, the social costs of binge drinking must be determined to effectively internalize the externality; more research is needed.

But, if we do assume that increased episodic consumption is negatively impacting public health, there are a few easy ways to nudge the Anglo-Saxon youth toward reasonable consumption. The first is to end “rounding up” and the second is to use new, available technology to limit individual consumption.

Rounding up is a phenomenon that I often engage in with my friends as we mull around the beer cave at a liquor store considering what to buy. Because it is cheaper to buy 30 beers than six, we always round up and get the 30. Sometimes 30 rounds up to a keg and so on and so forth, until you have enough alcohol to hospitalize a division three college.

Buying in bulk is an American phenomenon and I am convinced is also linked to obesity rates. When I lived in Italy I did not once see a 30-pack of beer for sale. The grocery store, a mile away from where I lived, had six-packs, but lugging them back wasn’t worth it. Did this decrease the amount of alcohol I drank? Not if I really wanted drink, but it sure made getting a large quantity inconvenient.

Implementing a tax on bulk alcohol would allow for easy arbitrage. People could just purchase  five six-packs instead of the, now more expensive, 30-pack, making the option less attractive.

The second solution is attractive because it makes arbitrage difficult.
In an article in Public Policy Research, Jasper Gerard (2007) contemplates raising the legal drinking age in the UK to 21. One of Gerard’s proposals is very interesting and I believe warrants an experimental implementation in a university town. His proposal is to require ID cards to purchase alcohol that not only indicate age, but also how many units of alcohol the holder purchased that day. This would also provide invaluable information to social scientists studying drinking patterns. A ceiling would be placed on the units of alcohol that could be purchased daily.

In this system arbitrage would be much harder. Alcohol consumption is constrained by the town’s population. I imagine a black market popping up where people who aren’t going to drink that day are paid to purchase alcohol for others. This black market would most likely be driven by fraternities as they prepare for parties. If these illegal transactions started to lead to campus-wide violence, the ID system probably wouldn’t be worth it. Similar to what the War on Drugs has done to Central America.

Besides the possible violent black market, the costs of implementing an ID system of the likes that Gerard proposes would be extremely high. When an ID is swiped, it would have to update, live, on a database to prohibit people from just going from liquor store to liquor store to obtain more alcohol. There would have to be exceptions for people who want to have social gatherings; keg registration measures are already in place to tackle this problem.  And the biggest problem is establishing the ceiling. How many units of alcohol are acceptable on a daily basis? Four to five drinks every two hours would definitely extinguish the fun from bars and barbeques throughout the country.

Taxing bulk alcohol sales and ending rounding up won’t stop those determined to go on a bender and there is little action besides unjustified, ruthless punishment that will eliminate binge drinking. Chaloupka and Wechsler (1996) show that policies that affect alcohol prices have little impact on binge drinking rates. Rather, it is the social atmosphere on college campuses, such as fraternity membership and the availability of alcoholic beverages, that has the greatest impact on prevalence. I imagine that binge drinking that occurs post-undergraduate also has a lot to do with the atmosphere of the area you choose to reside.

While research may indicate otherwise, I’m convinced ending rounding up will have an impact for the simple fact that if you only have 6 beers, that’s all you will drink. When you have 30, why not drink 15? The marginal cost of having one more is very little.

College students will continue to be innovative when it comes to drinking and they will always manage to find new, creative ways around price controls and laws, but that doesn’t mean we shouldn’t improve the current ineffective and often times too draconian system that is in place. We can start by removing retributive punishment where it isn’t deserved and by making the six-pack an economically viable option over the keg.


Chaloupka, Frank and Henry Wechsler. 1996. “Binge Drinking in College: The Impact of Price, Availability, and Alcohol Control Policies.” Contemporary Economic Policy 14: 112-124.

Gerard, Jasper. 2007. “Should we raise the age of legal drinking?” Public Policy Research.

Sabia, Joseph. 2010. “Wastin’ Away in Margaritaville? New Evidence on Academic Effects of Teenage Binge Drinking.” Contemporary Economic Policy 28:1: 1-22

Thursday, April 7, 2011

French ego/bloodlust

Nicholas Sarkozy fascinates me. He is fascinating because he just can’t keep himself out of the media spotlight.  When Wikileaks “revealed” that he is known for his thin skin and authoritarian leadership style, this was hardly revealing.

My interest in Sarkozy peaked when he made it a point to “resolve” the war between Russia and Georgia in the summer of 2008. At the time, the French held the rotating presidency of the European Council. As is typical for a man who has become known for his egomania, he became the center of attention when a ceasefire was brokered (at the behest of Russia rather than because of the personal charisma of Sarkozy). I thought a peaceful resolution of this conflict (this “resolution” still embitters Georgians) should have been a victory for EU diplomacy, but Sarkozy devoured what credit there was to be had.

History has repeated itself with military intervention in Libya. And the French response under Sarkozy has surprised me.

Sarkozy and David Cameron, Prime Minister of the UK, were the first to express their interest in the ouster of Moammar Gaddafi (does anyone know how to spell this guy’s name?) and urged the UN Security Council to pass a resolution supporting a no-fly zone.  Sarkozy got his wish and the Security Council authorized the use of force to protect civilians. China, Russia, Brazil, India and Germany abstained from the vote, while the other 10 members gave the go-ahead. Sarkozy organized a meeting in Paris, as Gaddafi’s troops neared the rebel stronghold of Benghazi, where there was a symbolic show of support among Western leaders. Turkey was left out.

So, yet again, Sarkozy led the charge in resolving this conflict, this time, however, advocating force over diplomacy. Force just isn’t an option when it comes to influencing Vladimir Putin’s Russia.
The use of force as a means for justice is always a touchy subject, but is one that I can examine in more depth working with the Transatlantic Trends survey at the German Marshall Fund*. Every year the survey asks its respondents (the U.S. and 11 European states) if they agree that war is sometimes necessary to obtain justice. The results affirm some assumptions and provide insight into why states intervened in Libya and what the future of the operation may look like.

Only a minority (17%) of the French public see war as an appropriate means to secure justice. This disdain is held by people across the political spectrum, left right and center. In Germany, on the other hand, who abstained from the Security Council resolution, almost a quarter of its public (24%), and a third (33%) of those who identify with the Right, warrant the use of force.  American and British support for the operation in Libya is not surprising. A majority of the U.S. public (76%), U.S. leaders (86%) and the UK public (61%) agree either strongly or somewhat with the question. The German abstention may stem from their deep rooted aversion towards war and the French support, controlling for the Sarkozy factor, could be derived from their colonial ties to the region.

What does this question say about the future? I can only hope that the recent defections of Gaddafi officials will encourage him to leave the country and a peaceful transition to democracy will take place. If, however, Gaddafi buckles down and gears up for a prolonged conflict, Sarkozy may decide, before impending elections, that his decision to advocate force was imprudent and disconnected from his constituents core beliefs. A splinter in NATO could lead to protracted American and British involvement, since it is their publics that can stomach combat the most.  

However, again I am surprised by a parallel conflict in Cote D’Ivoire. There the French have launched attacks against Luarent Gbago, the country’s (soon to be former) president who has been clinging to power since Alassane Ouattara declared himself the winner of elections held last month. The international community has accepted his claim and France has intervened with the approval of the Security Council. This conflict has been side stepped in the media; I’m sure much to Sarkozy’s dismay.  

Both because of a lack of public support and because of the stereotype of the pacifist Frenchman, constantly rolling over when faced with a military threat, I am amazed. Current events highlight that the French are resolved to use their military to enforce justice, a fact that opinion polls and history have disavowed. An interesting question is whether or not this is a reflection of their president or due to an unseen shift in French public opinion?

Where has the EU been regarding these conflicts? An article in the EU Observer reports that President of the European Council Herman Van Rompuy (Pictured above. He is no doubt not as recognizable as Sarkozy) has stated that the EU should take credit for preventing a “blood bath” in Libya. Outside of the EU Observer I have seen little on the Union’s response. The U.S., France, the UK and NATO have received all the attention in Libya. How can a man like Herman Van Rompuy possibly compete with the forceful personalities of Sarkozy or Obama?  This is all too typical of the EU and its Common Foreign and Defense Policy failing to take a prominent role in international affairs.

These recent interventions have not been without their critics.

In Slate, William Saletan posits that the U.S. is only intervening because Europe wishes to. It is pay back for their decade of service in Afghanistan. While this certainly played a role in U.S. decision making, I believe it is not the only reason.  

In his blog for the EU Observer, George Irvin cites many problems with using war as a means for peace. Top among them is the hypocrisy of intervening in Libya and not in countless other places around the world where civilians are endangered daily by tyrannical regimes. To respond to what I believe is a flawed argument, I’m going to evoke a thought experiment posed by Jonathan Safran Foer, author of Eating Animals, at a London School of Economics lecture I heard via podcast: If you consider yourself an honest person and your wife asks you, “do I look fat in this dress?” To which, of course, you respond “no,” but this is a lie, do you then, because you told one lie, go around telling lies the rest of your life? This was intended promote vegetarianism, but can be transposed perfectly to the situation in Libya and other conflict.

Unfortunately, as fallible humans, our beliefs are sometimes inconsistent and we are all hypocritical in one way or another. Just because the U.S. and its European allies haven’t instituted no-fly zones across North Africa, the Middle East, Cote D’Ivoire, Myanmar and a myriad of other conflict regions does not mean that our effort to help the people of Libya overthrow an unbalanced despot or the French support of a popularly elected leader if Cote D’Ivoire is not just.

Whether or not the motives behind Operation Odyssey Dawn were Sarkozy’s efforts to feed his insatiable narcissism or the U.S. repaying Europe for a long and unpopular war in Afghanistan, the end is clear: justice. An end that resonates innately in all people and one, in my opinion, that sometimes warrants the use of force. 

*The views expressed in this post are my own and not those of GMF.

Wednesday, March 30, 2011

The Skinny Bill and Common Twiggy Policy, Part II

Last time we investigated some possible causes of obesity, but, unfortunately, did not come close to finding a definitive answer. To sum up the last post: Agriculture subsidies are inversely correlated, economic freedom and hours worked annually have no discernable relationship with obesity.

So where does this leave us? Back to the questions: Are we just making poor choices at the super market? Why do we make these poor decisions?

First we will consider the body of research that is highlighting people’s addiction to food, followed by our non-physiological incentives to immediately grab white bread and sugary cereal.

As far back as 1949, neurologists began to see obesity as an addiction. Research has shown that reactions in the brain due to food cues, such as sight and smell, trigger the same chemical reaction that drugs induce (Dagher 2009, 30).  These food cues “do more than inform the individual about available rewards (reward meaning curing the displeasure of hunger); they energize the individual by creating an incentive state, motivating them to approach and consume food or other rewards with great vigor, a phenomenon that seems to be mediated in large part by dopamine” (Dagher 2009, 31). When we walk by a restaurant or street vendor we have to battle a craving that most of us would associate with a drug addict.

But why do food cues that bombard us daily, whether we are walking down the street or watching TV, usually lead to consumption of unhealthy foods? Shouldn’t we crave healthy food just as much as junk since both will equally satisfy hunger?

This is where the first antagonist of the obesity epidemic rears its head: sodium.

Yalcin Tekol (2006) defines a drug as “any substance that affects living systems” and lists criteria that drugs typically fit:

1. The substance is taken to relieve or avoid withdrawal symptoms.
2. The substance is often taken in larger amounts or over a longer period than was intended
3. There is a persistent desire or unsuccessful efforts to cut down or control substance use.
4. A great deal of time is spent in activities necessary to obtain the substance, use of the substance, or recover from its effects.
5. Important social, occupational, or recreational activities are given up or reduced because of substance use.
6. The substance use is continued despite knowledge of having a persistent or recurrent physical or psychological problem that is likely to have been caused or exacerbated by the substance.

It is shocking how perfectly sodium conforms to these criteria. There are times when I crave junk food, in particular fast food, sort of like withdrawal (1). I eat more salt every day than I know is healthy for me (2 and 6). While I’ve known the health risks associated with too much sodium intake and desire to reduce consumption, I have not acted on this rival impulse (3). And, I think anyone who has inhaled multiple items off of a dollar menu knows about recovering from its effects (4 and 5). Now swap out sodium for sugar or fat and you can see a real problem in the types of foods that we have access to.

The second and equally as influential, in my opinion, puppeteer of the obesity epidemic is poverty.

To steer the poor away from unhealthy foods many people argue for better food stamps and subsidies for healthy foods like fruits and veggies because it is largely assumed that healthy foods are more expensive than unhealthy ones.

I decided to consider this assumption by visiting my local Giant grocery store, where I was greeted by thousands of different foods of varying healthiness to choose from. Whether or not the gross amount of choice available is a bad thing is covered in Barry Schwartz’s book The Paradox of Choice: Why More Is Less. But, personally I like choice. I find myself to be a maximizer; I stress over many purchases I make, considering all the possible alternatives. When looking to buy a TV or computer this is difficult, but at the grocery store it’s easy, I buy what’s the cheapest because I am a destitute intern and currently a member of the no-income strata of society. 

I don’t mind monotony. I eat three different meals for breakfast, lunch and dinner, and eat them every day during the week. I think these meals are relatively healthy and cheap. I eat two eggs and a bowl of whole wheat cereal with skim milk for breakfast, a turkey sandwich and banana for lunch, and some kind of whole wheat pasta dish with ground turkey or chicken and green beans for dinner (think hamburger helper without the hamburger). Boring, yes.

But let’s see if my dull diet meets U.S. Department of Agriculture (USDA) dietary guidelines, and if not, how much it would cost me to within recommended limits.

Below is a chart showing what the USDA website informs me I need to consume to maintain my current weight (the site also politely mentions that I am over the healthy weight for my gender, age and height) and the costs of my previously stated, brutally uninteresting, diet per day, altered to meet the guidelines. Unit prices from Giant were used, and the USDA nutrient data laboratory is a necessary tool to change ounces into cups for unpackaged goods like apples and bananas to prevent a severe headache caused by slicing or mashing fruits and putting (or jamming?) them into a measuring cup.

Food Type
Recommended Daily Amount
10 ounces
4 cups
2.5 cups
3 cups
Meat and Beans
7 ounces

Eggs (2 large)
Skim milk
Guaranteed Value whole wheat flakes
Giant whole wheat bread (2 slices)
Giant sliced turkey (2 slices)
Banana (1 extra large)
Dinner (ew what's that?)
Nature's Promise whole wheat pasta elbows
Giant canned tomatoes (high in sodium)
Perdue ground turkey
Giant frozen green beans
Glass(es) of skim milk

Changing my diet to meet USDA recommendations transformed a diet that I thought was close to meeting healthy daily intakes of the different food groups, into a regimen that I found unpleasant. 

My consumption of meat and beans has always been way over the limit. I put more turkey on my sandwich than I should and I like to add beans to the dinner concoction to make it into chili(?).

Only a masochist could enjoy eating three cups of green beans. I also believe it’s physically impossible, except for maybe Joey Chesnut, but probably not since they aren’t as delicious as hot dogs.  Has there ever been a competitive eating contest of something healthy?

Spreading veggie intake throughout the day is my biggest challenge. I could add a salad or different veggie, but for me that is too time consuming. Already tired after work, to come home, prepare a healthy dinner and exercise, well, we all know it’s exhausting.  Add feeding and taking care of kids and you have a recipe for TV dinners and take out.

Around $6 a day may not seem terribly expensive but adds up for low-income earners and especially no-income earners like me. According to 2005 census data, 27% of the U.S. population made $25,000 a year or below. Let’s say that you make $25,000. According to the data the mean size of households at this income level was 2.14, so we will say there are two people in this hypothetical household. This family would spend $4,380 to feed themselves a sort of healthy diet like mine or 17.5% of their income.

This is a huge proportion of their income. I spend $1920 a year on using the metro alone. With rent, gas and car insurance, just to name a few types of monthly payments, I see why people begin to cut corners when it comes to their diet.

So where can we cut corners? Unhealthy foods are cheaper. While it would just be a bad decision to buy a bag of French fries over frozen veggies, buying white bread would save me a whole dollar. The whole wheat pasta would also go, followed by apples next. Fresh veggies are almost double the cost of their frozen counterparts and forget about anything organic or reduced fat. Tim Hartford reveals in The Undercover Economist why organic apples aren’t placed next to their non-organic alternatives: the price shock would be too much. The most expensive ground beef is always the leanest 97/3 cut.

Not only are we addicted to unhealthy foods packed with sodium, sugar and fat, they are the only thing we can afford. Imagine what would happen to a heroin addict who could afford an infinite supply of the vice. Well, that person would probably overdose, which is quite literally what we are doing with junk food.

What can be done?

Perhaps another addictive habit with high health risks is the most appropriate to consider: smoking.

The health risks associated with smoking took many years to self-actualize. This is not unlike health risks associated with certain types of food, however, opinion against junk food, which all evidence shows will kill you, has yet to reach critical mass.

While comparing smoking to eating has its obvious inconsistencies, the impact of regulation is the most important aspect to examine and has been considered by many economists.

One response to discourage smoking by state governments has been to increase taxes on cigarettes. Michael Marlow (2010) shows that government expenditure on tobacco control programs has had no impact on overall smoking prevalence. This is discouraging, but Lieu Feng (2010) finds that while higher prices don’t discourage our youth to take up smoking or quit, it does encourage older people to quit and quit for good, preventing a relapse.

By applying these findings to fat taxes, we can speculate that fat taxes won’t contribute to prevention or childhood obesity, but may act as a catalyst to get older people back into shape.

Besides taxes, another interesting aspect of the history of the cigarette to examine is advertising regulation. Time has a brief article chronicling this history. The now ubiquitous warning labels on cigarette packages came after the surgeon general published a 7,000 page report in 1965 on cigarette’s impact on public health. This also led to legislation banning TV and radio advertisements. Since the report’s publication smoking rates have halved from over 40% to around 20%.

However, it now appears that the prevalence rate is leveling off at 20%, shown in an article in The Washington Post. The Post speculates that the reason behind this is decreased spending on tobacco awareness programs and an advertising blitz by the tobacco industry, including Camel’s No. 9 cigarette, which blatantly targets women.

I used to believe that people who called for a ban on the inclusion of toys in Happy Meals were extreme. Put into perspective, a toy in a happy meal now seems similar to including a Joe Camel toy in every pack of cigarettes. Or picture a store that sells cigarettes that allows, after you purchase a pack, your child to jump around with other kids in a giant ball pit. This store would probably become the center of weekend family outings.

I’ve gone off track giving fast food restaurants a hard time when they are far from the only culprit. Back to the point at hand: Could a ban on junk food advertising lead to a decrease in the obesity rate? Did the advertising ban decrease cigarette smoking?

Like taxes, the impact of the advert ban on the smoking rate is a difficult question to answer. I’m not even sure if television stations could remain profitable if a comprehensive ban on unhealthy foods was legislated. Without Coca-Cola, McDonalds, and Doritos, who would pay for commercial air? The ramifications of such legislation would without a doubt be widespread across a multitude of industries. But this was also the argument of the tobacco lobby.

To solve the problem the government can intervene in two ways. The first is on the demand side. Here policy would attempt to shift our preferences through education programs or food stamps that can be redeemed for only healthy foods. The Food and Drug Administration could intervene on the supply side by compelling food providers to limit the amount of sodium, sugar and fat in foods where it isn’t necessary or  by requiring a warning label on fast food.

Unfortunately, the more I read about this epidemic, the more pessimistic I become. I’m afraid drastic supply and demand side intervention will be needed if our feeding habits are to change; there is no simple fix. From farm subsidies to our economic freedom, hours worked to our addictiveness to sugar, salt and fat and prices, all of these variables have an impact on the seemingly simple question that Michael Pollan begins his book The Omnivore’s Dilemma with: What should I have for dinner? I wish this wasn’t such a confusing question, but it is, and answering it will become one of our generation’s greatest challenges.


Feng, Lieu. 2010. “Cutting through the smoke: separating the effect of price on smoking initiation, relapse and cessation.” Applied Economics 42: 23, 2921-2939.

Dagher, A. 2009. “The neurobiology of appetite: hunger as an addiction.” International Journal of Obesity 33:30-33.

Marlow, Michael. 2010. “Do expenditures on tobacco control decrease smoking prevalence?” Applied Economics 42: 11, 1311-1343.

Tekol, Yalcin. 2006. “Salt addiction: A different kind of drug addiction.” Medical Hypotheses 67:1233-1234

Friday, March 18, 2011

The Skinny Bill and Common Twiggy Policy, Part I

At the beginning of last month (employment opportunity and relocation has postponed work on the blog), Mark Bittman wrote an opinion piece for The New York Times titled “A Food Manifesto for the Future” that has brought me back to the topic of obesity.

Bittman outlines many policy solutions that, he believes, will achieve a healthy and safe American diet. One is the abolishment of agricultural subsidies and is where I want to begin walking you through my thought process behind the causes of obesity.

Agricultural subsidies are, perhaps, the most contentious international and domestic policies in both the U.S. and EU. The Farm Bill in the U.S. and the Common Agricultural Policy (CAP) in Europe are multi-year frameworks outlining government expenditure in the billions. They have the backing of politicians and strong lobbies. The farm lobby in Europe is, arguably, the most influential interest group. Many countries who consider themselves allies find themselves coming to blows during trade negotiations over these market distorting subsidies and tariffs that are contrary to the goal of the World Trade Organization (WTO), free trade.

This post could easily spiral out of control by attempting to determine causes of obesity and by giving a comparative analysis of agricultural policies, so I've decided to divide it into two parts. In Part I, I will explore some possible causes of the obesity epidemic (outside my previous speculations) and Part II will consider the cost of my own diet and where government subsidies or taxes may have a role in discouraging you from pulling into a McDonald’s drive-thru.

The Organization for Economic Cooperation and Development (OECD) compiles a number of statistics for its members regarding their agricultural policies. The most important and useful data available are Producer Support Estimates (PSE). PSE indicate how much each state spends to prop up and protect its agriculture sector (complete information on PSE is available here). With Bittman calling for the elimination of these subsidies, I began to wonder why the U.S. is so obese when our Farm Bill is small relative to Europe’s CAP, and why Europe’s love handles are becoming ever more pinchable as CAP spending is ramped down.

Here is the result of a correlation between farm spending and adult obesity prevalence. Disclaimer: This is an obvious case of correlation, not causation (a favorite example of one of my IR professors was ice cream sales and murder rates), but I believe it is an interesting observation and one that we can learn from.
Using statistical software (I lack the means of computing rudimentary arithmetic without a calculator), we can see the negative correlation between these two phenomena is strong (the two-sample t-test was .022 for those statistically inclined). Using another tool, linear regression, provides us with a linear equation ( y=-.65x+23) that can be seen by the line of best fit in the scatter plot. With this equation we can create hypothetical examples outside the observed cases.  The Adjusted R Square tells us that the independent variable, farm subsidies in this case, accounts for 36.5% of the variance (change in obesity prevalence), a large amount.

Now for a hypothetical application…

According to this model, we can see that if you spend one more dollar per person on farm subsidies you will lower your country’s obesity rate by .65%, and looking at the line of best fit tells us that if you spend around $1000 per capita you can eliminate 36.5% of your obesity problem. In the U.S. this would take government expenditure amounting to $30.6 trillion and would lower the obesity rate from 33.9% to 21.2%.The EU on the other hand would have to spend $120.8 trillion, or about 200% of global GDP, to lower their rate to 9.2%.  And we thought the farm lobby was strong now…

But these models, which were the bane of my undergraduate existence, are only as strong as the data you put in. In this case, I accounted for no other variables except farm subsidies.

To propose any budget increase, in this time of austerity, would be political suicide, let alone an item as absurdly large as the model dictates, but the relationship raises an interesting question: How is the free market affecting our diet as countries continue to tear down protectionist policies? Which in turn asks the causal question: Are countries that are the most free the most obese?

To roughly examine the second question, one of the many indexes available that evaluate freedom will be of much help. For our purposes, I chose to use the Heritage Foundation’s Index of Economic Freedom (liberals may cringe at the use of a conservative think tank as a source, but as Jamie Whyte reminds us in Crimes Against Logic, a book I highly recommend, it is a logical fallacy to assume that Heritage’s motivations make the index a less valuable resource. Be skeptical, but don’t disregard). The index measures 10 components of economic freedom, such as trade freedom and property rights and based on those 10 components rates a country from 0 to 100 (more information here).

As before, correlation tests can be run to explore the relationship between these two phenomena. Below is a scatter plot of 86 countries.
It is obvious that there is no significant relationship. Even when only the developed world is tested, no correlation is revealed. So, we can conclude that there is no relationship between economic freedom (as defined by the Heritage Foundation) and obesity.

Maybe the obesity epidemic has nothing to do with freedom, but rather how much time we spend working. Certainly the Protestant work ethic forces us to consume copious amounts of fast food because we live to work and the poor have to work 2+ jobs to stay afloat?
While it appears there could be a relationship between these variables when the outlier Korea is removed, a t-test produces a p-value of .191 indicating that the correlation is not significantly different than 0 (sorry for the statspeak), or simply put, there is no association between the two variables.

If it’s not hours worked annually, is it the type of jobs we work in the U.S. relative to other countries? Do the poor work more “blue collar” jobs and are more exhausted from their work which accounts for poor food choices?

This is hard to evaluate. The U.S. labor market has been undergoing a transformation from manufacturing to services, with around 80% of jobs now located in the latter. The same is true of Europe, but a slightly lower proportion depending on the country.  One might think that this shift would cause jobs to be less physically demanding by generating more "white collar" jobs, but think of landscapers, janitors or roofers, they all provide services. Even to speculate whether this structural shift in the labor market has made jobs less laborious would be imprudent on my part. It's nearly impossible to determine who works "harder" and if that influences the time they spend on preparing food. A survey would need to be conducted.

This will wrap up Part I and has hopefully given you some food for thought as we scratched the surface of the causes of obesity. 

To sum up what may have been a confusing post, but has given you a glimpse into my thought process: 

There is a strong negative correlation between farm subsidies and obesity rates, is this a causal relationship? No, but it is an area to be explored in more depth. There is no relationship between economic freedom and obesity rates, so how has capitalism affected world diets? Hours worked annually also yields no significant correlation with obesity, but could it be possible that the type of jobs people work are determinate of how obese they are?

In Part II of this post we will look into my personal diet, the daily cost to eat healthy and review some literature to examine if there is a justification for government intervention to force us to fit into our bathing suits come summer.