The Economics of Obesity

Statistics from last year show that the number of obese adults in the developing world has quadrupled since 1980 to a one billion. Over one third of American adults are deemed obese, as are more than a quarter of British adults, resulting in Britains NHS spending over £5bn a year on health problems associated with being overweight or obese.

Obesity is evidently a growing epidemic, but why? It is almost undoubtable that economic-related factors play a significant role in this.

One of the most notable shifts in the lifestyle of our society has been that the wealthy and the poor have almost switched positions with regards to levels of obesity. A study undertaken by the American Journal of Preventative Medicine compared the dietary and health lifestyles of poorer and wealthy individuals, and determined that those earning under $20k are 50% less likely to exercise sufficiently than those earning over $75k, and instead they are 50% more likely to purchase over the counter diet pills which are pretty much quack medications.

It seems the major reason for this is the lack of time many poorer people are likely to have. With almost 7 million Americans working multiple jobs, and 41 million Americans receiving insufficient hours of sleep according to the Centre for Disease Control, time is becoming a premium for many poorer Americans whose economic straits lead them to take up multiple jobs or jobs with hours that reduce their ability to lead a healthy lifestyle. These people are likely to have less time to go out and exercise (hence their purchasing of get slim quick pills), are more likely to be drawn towards processed fast food as opposed to home cooking and thus are more likely to live a lifestyle that will make them overweight. Wealthier middle and upper class people, on the whole, have access to more free time, which allows them to spend more time cooking their meals from scratch and going out to exercise. In the UK, this is reflected in how average household income of a gym member is 35% higher than the national average.

But you could mention the 8.2% of people who are unemployed in the States, and other developed countries. They should have plenty of free time, no, to go out and run and cook meals? Well, most likely, yes. But this brings us to the other issue in this obesity crisis.

Food prices are becoming more diverse than ever. A study by Dr Pablo Monsivais of the University of Cambridge found that, in 2012, healthy foods were three times more expensive per calorie than less healthy foods. For a more specific example, take a frozen pizza, a typically unhealthy food- in 2002 1000 calories worth of frozen pizza cost £2.10, falling to £1.58 10 years later. On the other hand, 1000 calories worth of tinned tomatoes more than doubled in the same time period. This is emphasised by the massive increase in reliance upon food banks, which are currently unable to provide for a sufficient number of people to change the status quo.

You can see it every day in the shops- look at how much more expensive the top brand meals, which are usually made with less additives and purer ingredients, are than their cheaper, diluted, lower quality alternatives. Look at the difference in price between organic and basic stuff.

Not only are the poorer in society lacking time to create healthy, nutritious meals, but they evidently lack the finances. Ready meals, frozen foods, fast foods (a McDonalds burger for $1, really?) and so on having devastating impacts on the health of not just the poorer in society but its sheer popularity means it is affecting society as a whole.

So it is undoubtable that economic conditions play a significant role in ones health, particularly with regards to the issue of obesity.

Recent trends present a shift from past centuries. Throughout history, a large belly was seen to be a sign of wealth, and indeed it was- it meant you could not just fill your appetite but also afford to indulge in food. The poor in society barely got enough to survive, let alone become overweight. But as society has progressed and peoples economic standards have risen, this has changed. Significantly more people (though poignantly still not all) in developed countries can afford to feed themselves, but there remains much to improve with regards to quality of life. We are able to feed most people in the developed world- perhaps a move we will soon have to look to is to ensure what people are eating is beneficial for them.

RECOMMENDED READS

Researchers Point to Economic Reasons for Obesity http://www.consumeraffairs.com/news/researchers-point-to-economic-reasons-for-obesity-020415.html

Impatience, Incentives and Obesity http://onlinelibrary.wiley.com/doi/10.1111/ecoj.12124/abstract

Rich People Exercise, Poor People Take Diet Pills http://www.theatlantic.com/health/archive/2014/08/rich-people-exercise-poor-people-take-diet-pills/378852/

Trying to Lose Weight: The Association of Income and Age to Weight-Loss Strategies in the USA http://www.ncbi.nlm.nih.gov/pubmed/24842735

Price Gap Between More and Less Healthy Food Grows http://www.cam.ac.uk/research/news/price-gap-between-more-and-less-healthy-foods-grows

Sources for evidence and data can be found within the hyperlinks in the text.

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What Has Happened To The Greek Economy

 The recent decade has seen turbulent times for economies all around the world, and perhaps the most notable of such sufferings have been witnessed within Southern Europe. Spain, Portugal and Italy have fallen into economic turmoil, but one could argue that these problems pale in comparison to those being currently faced by Greece, a country where the last 6 years have seen unemployment triple, public debt ruthlessly pile up, and the economy shrink by a quarter. The lack of money in Greeces financial institutions is such that citizens are being warned of banks shutting down their ATM services, simply because there is not enough cash to give to people who want to withdraw from their own accounts. In 2012, the situation got so desperate that the government had to secretly ship in cash from abroad to prevent a shortage.

But where did it all go wrong? Why is it Greece in particular that has gone through even tougher times than the rest of Europe?

Well, from the onset you can see that the deadly nail in Greeces economic coffin has been its borrowing from other countries and organisations such as the IMF, in order to finance public spending.

Greek public spending during the 2000s was incredibly high, especially in relation to the size of the economy and its productivity. Spending on the public sector (as a percentage of total public expenditure) was higher in Greece than anywhere else in the OECD, yet according to Paul Belkin, Derek Mix and Rebecca Nelson, there was "no evidence that the quantity or quality of the services were superior". Indeed, the nominal output of the Greek economy had grown by 40%, and tax revenues 31% between 2004-2009, yet total government expenditure grew 84% during this period. Some
argue that the Greek governments of recent decades have been bribing the electorate, providing public sector jobs that are overpaid in order to maintain popularity among the public- at the cost of long term economic stability.

Spending also came in forms other than public sector employment. The 2004 Olympic Games, for example, put a crippling burden upon the government of $8.6bn, contributing to debt by 2005 amounting to €50,000 per household.

What further compounded the economic struggles was the outbreak of tax evasion Greece has seen in the past decade, particularly since the financial crisis of 2008. According to a Greek Finance Ministry Report, during the initial period of crisis, the state had only taxed a third of its citizens officially declared income. More recently in 2013, it was revealed that the state collected only half of what was due in 2012. Such tax evasion activity has been estimated to cost the treasury over $20bn a year, and it has landed Greece the rather unenviable positions of having the lowest tax revenues per capita in Europe, and according to the 2012 Corruption Perception Index, being the most corrupt country in the EU.

Greek Debt, visualised in trucks of cash.

The consequence of such public spending in spite of a lack of revenue for the government has resulted in a colossal amount of debt being collected in Greece. As of now, Greece owes €360bn to the IMF, the ECB, and numerous lenders throughout Europe, notably from Germany, France and Italy.

Theoretically, lending and borrowing usually works out for both parties. The general idea is that a country can borrow from another, and use that money to be productive and make more money, allowing them to pay back the lender and also make a profit.

But Greeces situation is far from theoretical; despite efforts by the European community to reduce its debts (in 2011, the banks had to agree to half Greeces debts to them), the outlook is not rosy for the Mediterranean nation. Its newly elected leaders, the Syriza government are being brutally honest about how they see the future and fears are escalating that they will have to default on their debts, a move that will accompany an exit from the Eurozone and no doubt a long ensuing period of turmoil and instability, not just for Greece and its citizens, but for much of the rest of Europe too.

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