Role for Government: In Principle

The primary economic rationale for government intervention to reduce obesity relates to externalities. An in-principle case can be made for government intervention on these grounds. Various interventions are feasible, including government incentives related to food consumption such as taxes or subsidies on “unhealthy” and “healthy” foods; government incentives related to healthy behavior and health outcomes; government provision of education or information about nutrition, including regulation of food labeling; government regulation of the food industry and its marketing practices, such as advertising to children; or rules and regulations pertaining to the provision of public and private health insurance. This chapter reviews these options and their relative merits in principle, paying attention to the issue of matching policy instruments to targets.