There have been calls for the imposition of tax on fast foods, with the intended goal of such a measure being to discourage the use of such foods because of their associated high health costs. There are criticisms to such a proposition, including the fact that it is difficult to associate the externality of high health costs directly with junk food. There are also concerns that the price increase for junk food due to the taxes may result in the decrease in the real income of people in poorer neighbourhoods who do not have a choice of fresh foods. This paper will argue that the choices that people make regarding the use of junk food was due to the satisfaction they derived from such products using the theory of utility.
Utility is a generally a measure of the satisfaction that a consumer gets from the consumption of a set products. Consumers or the society in general have a combination of commodities which give them a level of satisfaction from the consumption of the said commodities. The consumption of junk food is widespread in the United States. It can only be assumed that consumers gain a level of satisfaction from the consumption of these high calorie and low nutrition foods. This would explain why the consumers go for these products repeatedly.
Although it is impossible to quantify utility on specific measurable terms, it is possible to rank the alternatives in their order on which the consumers prefer them. In this particular case, there are many food alternatives. Consumers in the United States have a choice which can be classified into three general categories; junk food which is high on calories and low on nutrition, fresh food which can be prepared at home and nutritious ready food which is available in many of the food joints and restaurants spread across the country. Given these choices, it is assumed that consumers have attached different levels of preferences to these general choices. It can therefore be concluded that consumers have given junk food a higher preference to the other categories of food. This would mean that despite the risks associated with the consumption of junk food, consumers gain more satisfaction from it than they gain from the other categories which have more beneficial effects on their health.
The preference of a commodity from a set of alternatives can also be influenced by several factors. Utility derived from a commodity is constrained by two major factors, the price of the commodity and the income of the consumer. Taking consideration to these constrains that consumers face when making a choice of food, it a assumed that they will go for the choice which maximizes their utility. Incomes are limited and the prices are set by the suppliers of the food. Comparing the prices of these categories of food available to American consumers, it is evident that junk food is the cheapest. Consumers therefore choose the alternative that has the lowest cost assuming that incomes are constrained. It can be therefore concluded that the low cost of junk food and its ease of availability provides some level of satisfaction of to the consumers.
According to the utility theory of utility, a rational consumer will only spend money on an additional unit of a good or service unless the marginal utility is at a least equal or greater than that of the previous unit of good or service. Consumers, taking into account the constrains that have on their incomes, will most likely go for the choice which will go for the choice which gives the most satisfaction from the least use of money, in this case junk food. By implication, this means that the marginal utility that consumers get from the consumption of additional unit of junk food is higher than that they get from the other categories of food available to them. This means that the marginal utility of a commodity is related to its price. Consumers will likely rank the choices of the various categories of food according to price, and by implication will choose junk food over the other categories of food due to its higher marginal utility.
The utility theory assumes that choices cab be made by individuals or a society. Though junk food is eaten as a choice by individuals, it can be seen as a choice of the American society. The use of junk food is a phenomenon that runs across the United States. The marginal utility derived from the consumption of junk food must be higher in the American society.
In conclusion, making the assumptions that that underlie the utility theory, it can be concluded that the choice of Americans of junk food despite there being other healthy alternatives available is because they derive more satisfaction from its consumption that they do from other foods. The marginal utility from junk food is higher than that of the other categories of food, and thus consumers’ preference for it.
References
Anand, Paul. Foundations of Rational Choice Under Risk. Oxford: Oxford University Press. 1996
Plous, S. The Psychology of Judgement and Decision Making. New York: McGraw-Hill. 1993
Gilboa, Itzhak. Theory of Decision under Uncertainty. Cambridge: Cambridge University Press. 2009
