The rise of obesity in Europe: an economic perspective

Abstract: Obesity in Europe is rising. This paper investigates the economic rationales for public intervention to control obesity. It presents new empirical evidence showing that family background is related to obesity among young European adults. This evidence provides a strong basis for intervention on equity grounds, particularly targeted towards children. The case for intervention on efficiency grounds is less clear-cut and in most cases the evidence is relatively weak. It finds insufficient evidence that information deficiencies are important, as the majority of Europeans appear to be aware of the bad consequences of obesity on health. It also finds that the potential health insurance externality -- non-obese effectively subsidizing obese individuals -- is small. In support of policy intervention, the article shows that there are product and labour market imperfections. Obese employees earn less than the non-obese. It also finds that there is a remarkably high proportion of individuals with self-control problems, who fail to stick to their self-declared weight-related plans. Regulations that affect fast food advertisements and the location and access to fast food vending machines and establishments may help these individuals in controlling their weight.

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