Doctors need the facts on economics

To a Senate hearing on obesity issues, health expert, Professor Christian Gericke argued that there was an obesity epidemic amongst children and said:

“We should also subsidise fresh fruit and vegetables, the healthy option, so not to punish people with a tax, but counterbalance that by making the healthy foods cheaper.”

Good news. We do! Fresh food is exempt from the GST and we can count our water pricing policy as a subsidy to producing fresh produce. That means at least 10 percent less tax. Sounds like an incentive to me. Did anyone care to measure diet and obesity before and after 2001?

I’m thinking, price isn’t the issue here. You can pretty much give it away and it will change little. We try this every night. Of course, then again we ban other stuff and make it choice between eat this or starve. It is not uncommon to choose to starve.

But, hey, what do I know. How about we conduct a randomised trial to work out (a) how much diet really impacts on obesity and (b) whether if you uses taxes and subsidies you can change diet in a positive way? Until we are willing to hold up economic policy to the same standards we do when prescribing medical treatments, let’s stop throwing these suggestions out there.

4 thoughts on “Doctors need the facts on economics”

  1. Alas, the utility of the 2001 GST experiment is wrecked by the exemption of cooked chickens. Damn you Meg Lees. You destroyed the Democrats and added a couple of sizes to my trousers.

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  2. I agree with your sentiments but whenever I suggest to economists employed in policy positions that there may be other ways to change behaviour than to change the price then I am told to achieve your objectives you only have to fix the price. It is no wonder doctors say these things because they have been brainwashed by someone perhaps masquerading as an economist somewhere.

    To give you an example we are being told that if we increase the price of cigarettes we will drop consumption and I will bet that there is some economist somewhere who has calculated the price elasticity of cigarettes – but failed to consider the switch to roll your owns, cigars, other drugs that are smoked and who has not considered the amount of money being spent on advertising etc.

    We are also told that to conquer binge drinking all we have to do is to charge a lot for fancy alcohol drinks.

    So please do not blame the good doctor for his views. He got them from somewhere.

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  3. Kevin, either you only talk to pretty dodgy economists, or they’re trying to get rid of you. I worked in policy for a while, and perhaps 1 in 50 would have said that only price needed to be changed to cut smoking. All would have said price affects smoking, though, and they’re backed up by many studies show this to be the case. And there are many studies by economists on the effects of other policies on smoking and obesity, so it’s certainly not the case that price is the only policy tool considered by economists.

    Also, Joshua’s (a) is not really about economics, but rather medicine/ physiology/ whatever, and we still don’t have all the answers there, either.

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  4. OK, they’re not randomised trials but figures I’ve read indicate that the increases in obesity have been accompanied by a fall in the relative price of food in general and processed food in particular.

    Eg, the graphs here are interesting:
    http://www.env-econ.net/2006/03/why_are_we_fat.html

    I reckon that price is a factor. Maybe not the best factor to use as a policy tool to change behaviour but a factor.

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