Cut Childhood Obesity — Raise Revenue

Health economist Michael Grossman suggests that eliminating tax deductions for fast food advertising would both reduce obesity and raise tax revenue with one action. In a recent analysis, Grossman and colleagues found that banning fast food advertisements would reduce obesity when measured by percent body fat, a measure that some experts believe is a better metric than body-mass index (BMI). His analysis shows how social research can open minds about solutions to problems which require new thinking, as obesity does.

Grossman quantified how persuasive snack and fast food advertising is on children in their National Bureau of Economic Research paper. They analyzed measures of body fat from the National Health and Nutrition Examination Survey and individual level data from the National Longitudinal Survey of Youth 1997, along with data on local fast food restaurants television ads from Competitive Media Reporting.

Previous studies have found that children are quite impressionable. For example, one study found that watching 100 advertisements for soft drinks over a three-year period was associated with a 9.4% increase in soda consumption. Grossman’s previous research suggested that a ban on advertising fast foods would cut down on childhood obesity by 10%.

In this new paper, the results indicate that a ban on fast food ads would decrease the number of overweight children ages 3-11 by 10%, and would reduce the number of overweight adolescents ages 12-18 by 12%. Since it may be impractical to consider a total ban on advertising, the researchers also calculated what would happen if fast food businesses were prohibited from counting the costs of advertising as a business expense for tax deductions. A previous study found that losing the tax break would reduce childhood obesity by 3 to 5 points, and even though the new study doesn’t provide a numerical estimate, it describes such action as “non-trivial.” This could increase U.S. tax revenues while decreasing childhood obesity.

Click here to read the study in the National Bureau of Economic Research Working Paper Series and here to read the synopsis in the Washington Post.

Fast Food Chicken image © Fir0002-Flagstaffotos / Wikimedia Commons