Childhood obesity: An economic perspective

21 Oct 2010


Key points

  • The weight of Australian children has increased markedly in recent decades, to the point where around 8 per cent are defined as obese (based on Body Mass Index), and 17 per cent as overweight.
  • While the prevalence of obesity may have levelled off since the mid 1990s, it is still widely considered to be too high.
  • Childhood obesity has been linked to a raft of physical and psychosocial health problems, including type 2 diabetes and cardiovascular disease, as well as social stigmatisation and low self-esteem.
  • Simply put, obesity results from an imbalance between energy consumed and expended. But the underlying causes are complex and difficult to disentangle.
    • An economic perspective considers how individuals respond to changes in incentives, and how they make decisions involving tradeoffs between different consumption and exercise choices, including how they spend their time.
  • Governments need to consider a range of issues in addressing childhood obesity.
    • Most of the costs of obesity are borne by the obese themselves and their families.
    • Market incentives to provide information about the causes and prevention of obesity are weak, creating a role for government. But unlike alcohol and tobacco consumption, the externalities (spillovers on unrelated third parties) associated with obesity are probably minor.
    • Behavioural limitations can influence how people use available information about preventing obesity — even when it is available — and their responses to incentives and tradeoffs. Children are particularly susceptible to these limitations and have difficulty taking into account the future consequences of their actions.
    • Obesity prevalence varies across the socioeconomic profile of the community, such that there can be important distributional issues.
    • The obese also consume a disproportionate share of medical services, which, equity considerations aside, adds to the costs of our public health system.
  • There is only limited evidence of interventions designed to address childhood obesity achieving their goals.
    • This could reflect the inherent complexities and the multiple causes of obesity.
    • But it might also reflect poor policy design and evaluation deficiencies.
  • Notwithstanding the lack of evidence of interventions reducing obesity, some studies suggest that they can positively influence children's eating behaviours and levels of physical activity, which in turn might influence obesity over time.
  • The complex nature of the problem suggests that policies need to be carefully designed to maximise cost-effectiveness, and trialled, with a focus on evidence gathering, information sharing, evaluation and consequent policy modification.

Image: colodio / flickr

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