The Future of Fast Food


A new study, published in the Millbank Quarterly, looked at the impact that government taxes and subsidies might have upon the growing trend of obesity in the United States.

Based upon their research, “nontrivial pricing interventions might have a measurable effect on Americans’ weight outcomes, particularly those of children and adolescents, low-SES (socio-economic status) populations, and those most at risk for overweight.

Even though they would have only a small impact on individual behavior, such interventions could have a large impact at the population level when applied broadly.

And what do they mean by nontrivial pricing interventions?

The empirical evidence supports a multipronged approach, especially for children and adolescents, of changing relative prices by both taxing less healthy, energy-dense foods and subsidizing healthier, less-dense foods.

Aaahhh, taxes and subsidies = nontrivial pricing interventions

The Justification for Increased Taxes and Subsidies


The researchers found that the price of junk food and sugar had a large effect on adolescent and adult rates of obesity.

Well, that makes sense. How many chubby little kids can afford a $29.95 Happy Meal.

As well, subsidies of fruits and vegetables were also estimated to improve children’s and adolescents’ weight outcomes.

Cheaper fruits & veg…why didn’t I think of that.

And finally, this price sensitivity was found to be strongest with overweight and low-SES children.

And it just so happens that low-SES kids have higher rates of obesity than their Richie Rich schoolmates.

So, there you go.

It’s all about the kids. The poor little fat kids.


Of course, it’s the fat parents of those poor little fat kids who are going to have to foot the bill.

And dammit, Americans don’t like taxes.

or, do they?.

Currently, state taxes on sodas and various junk foods are relatively low, and no state or local government has used these taxes to promote healthier eating and reduce obesity.

See, cheap subsidized corn + low “food” taxes = more Extra-Value meals per citizen.

But wait….

The same was generally true for state cigarette taxes before the public became aware of the health
consequences of smoking
, when cigarette excise taxes were only a few cents per pack and revenue generation was their primary purpose.

uh, oh…

But as evidence accumulated about the health and economic consequences of tobacco use and as research demonstrated the effectiveness of higher taxes and prices in reducing tobacco use, governments have increasingly used these taxes to promote public health.

Inflation-adjusted state cigarette taxes more than tripled, on average, from 1982 to 2007, contributing to a more than 160 percent rise in average cigarette prices during this period.

In turn, these price increases have been credited with driving most of the recent declines in adult smoking prevalence.


The days of Big Gulps and Super-Size-Me are just about over.


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Powell et al. Food Prices and Obesity: Evidence and Policy Implications for Taxes and Subsidies. Milbank Quarterly, 2009; 87 (1): 229 DOI: 10.1111/j.1468-0009.2009.00554.x