The Skinny on Fat

Writing in the Summer 2004 Issue of The Public Interest, economists Inas Rashad and Michael Grossman explain, The Economics of Obesity:

According to our research, as much as two-thirds of the increase in adult obesity since 1980 can be explained by the rapid growth in the per capita number of fast-food restaurants and full-service restaurants, especially the former. .... Food served in these restaurants has extremely high caloric density, and almost certainly has contributed to obesity. .... Indications point to restaurant growth as the primary cause of increased obesity after 1980.

What caused this explosive restaurant growth? The principal driver seems to have been the increases in rates of labor force participation by women. As nonwork time for women became increasingly scarce and valuable over the last few decades, time devoted to at-home meal preparation decreased. Families began eating out more often. Indeed, the economists Patricia M. Anderson, Kristin F. Butcher, and Phillip B. Levine find that the rise in average hours worked by mothers can account for as much as one-third of the growth in obesity among children in certain families. In part, the rise in obesity seems to have been an unintended consequence of encouraging women to become more active in the workforce.

We have also unmasked a second and perhaps more surprising culprit in the alarming rise in obesity: the crackdown on smoking via tax increases. Higher cigarette taxes and higher cigarette prices have caused more smokers to quit — but these smokers seem to have begun eating more as a result. According to our research, each 10 percent increase in the real price of cigarettes produces a 2 percent increase in the number of obese people, other things being equal.

.... The inflation-adjusted price of cigarettes has risen by approximately 164 percent since 1980. This large growth resulted in part from four federal excise tax hikes, a number of state tax hikes, and the settlement of the state lawsuits filed against cigarette manufacturers to recover Medicaid funds spent treating diseases related to smoking. The rise in the real price of cigarettes is the second-most important factor next to the growth in restaurants in the trend in the post-1980 obesity trend. We estimate that it accounts for almost 20 percent of the growth in obesity.

Our findings underscore the idea that social action can have unintended consequences: Oftentimes, there is a tradeoff involved in achieving goals that society favors, such as increased food production, more workforce participation by women, and fewer smokers. Lower real food prices have significantly increased living standards. Expanded labor market opportunities for women have increased families’ command of real resources and increased equality of opportunity.

Cigarette smoking is still the largest cause of premature death among Americans; pushing smokers to quit will have obvious health benefits. But our results and those of other economists also suggest that these efforts contribute to the rising prevalence of obesity. Whether public policies should be pursued that offset this ignored consequence of previous public policy to discourage smoking, increase market opportunities, and make cheaper food available depends on the costs and benefits of these policies.