What are the externalities associated with obesity (both positive and negative)? In other words, in what ways do the effects of obesity spillover to those who may not be considered obese?
Essesntially, externalities that are associated with obesity revolve around the positive and the negative issues concerning the social costs (Cawley & Meyerhoefer, 2012).On this note, Cawley & Meyerhoefer, (2012), opines that the social costs associated with obesity may outweigh the benefits. In line with this, the negative externalities encompass the health issues of the people residing around the patient that often leads to psychological problems. As demonstrated in the case under review, the two patients have to provide for their families despite their health condition that leads to diabetes. This issue could be a cause for psychological discomfort among the patient’s relatives, which ultimately affects them even economically. In addition, obesity could be a cause for unhealthy ailments such as diabetes that ultimately affects the economic status of the people who are close to the patient (Philipson & Posner, 2008). Further, the economic productivity of the people suffering from obesity is constrained thereby affecting the close people. It is seen that the high costs of providing drugs at subsidized rates is an economic exploitation of the obese people (Philipson & Posner, 2008).
Regarding this matter, for the people who take care of the obese people forego some benefits such as their free time and other economic constraints to provide for the obese people who are considered as less productive (Cawley & Meyerhoefer, 2012). As such, obese is seen as having numerous externalities from an opportunity cost perspective. From another dimension, obesity is seen as having positive externalities that encompass the business opportunities for the fast food industries and market (Cawley & Meyerhoefer, 2012), It is observed that obese people have a tendency of consuming fast foods such as junk foods and hence economically promoting purchases of such unhealthy foods. In this case, obese people are seen to promote a whole production line of such foods right from the ingredients to the ready meals (Philipson & Posner, 2008). It can be demonstrated that from a micro-economic aspect, there are social costs and benefits that are related to the persons with obesity that may improve the economic status of some individuals while also negatively affecting others (negative externalities).
References
Cawley, J., & Meyerhoefer, C. (2012). The medical care costs of obesity: an instrumental variables approach. Journal of health economics, 31(1), 219-230.
Philipson, T., & Posner, R. (2008). Is the obesity epidemic a public health problem? A decade of research on the economics of obesity (No. w14010). National Bureau of Economic Research.
