Entries Tagged 'society' ↓

I wrote an

Essay on the Problems of Obesity and How to Overcome it

The below table shows quite a divergence of obesity rates throughout the world. Interesting that France, Spain and Italy all have a low rate of obesity, maybe they are used to eating more healthy foods.

Percentage of people classified as obese

		% obese
		female	male
USA	1999-2000	34	27.7
Argentina	1997	25.4	28.4
Mexico	-	25.1	14.9
Russia	-	25	10
England	2001	23.5	21.0
Germany	1991	19.3	17.2
Finland	-	19	20
Spain	1997	15.2	11.5
Italy	1999	9.9	9.5
France	1995-1996	7.0	8.0

• Food Standards Agency
• Data collated from various published sources and quoted in ‘Food Manufacturing: Obesity – the big issue’ (J P Morgan European Equity Research)

Readers Question: Asses the impact of a decline in state pensions on income distribution, wages and income inequality for people aged 60 or above?

Firstly, the ‘decline in state pension’ actually means they have fallen relative to wages. For several years, state pensions were index linked - increased in line with inflation. Therefore, in real terms they stayed the same (although, some may argue the inflation rate for pensioners is higher than the official CPI method, therefore they are actually worse off in real terms)

Also pensioners have been entitled to an increased number of means tested benefits.

Having said that. These are the effects of a relative decline in state pensions.

1. Those who rely on state pensions have seen a relative fall in income; leading to an increase in income inequality within society.

• EVAL with an increase in the number of people over 60, this has become a more significant cause of relative poverty in the UK. Continue reading →

In this post (benefits for the fat?), I looked at the economics of a guy who lost 30stone, including a £10,000 operation paid for by the NHS. Should we pay for people to have an operation like this? Is there a case for giving fiscal rewards for people who lose weight?

Continue reading →

Discuss Arguments for and against the legalization of Cannabis and the taxation of the good by the Government.

Legalising cannabis and placing a tax on the good has several advantages

1. The Government can raise revenue from the tax. Because demand is likely to be inelastic the tax revenue could be quite high. The tax revenues could be used to help finance health care and treat lung cancer (things associated with dope smoking

2. It would reduce size of black economy. If cannabis was legalised it would reduce criminal activity. It would also free up police time to investigate more serious crimes and drug use. Continue reading →

Recently, I had a question about cost effectiveness analysis. Basically this is a branch of Economics which looks at which health treatments offer the best return for the cost involved.

The problem is that health care is an emotive issue and the idea of economists saying which treatments should be used and which should not be allowed is liable to create much criticism.

This short essay is a look at some of the issues involved - Deciding Who Gets Treatment 

The fundamental problem of economics is scarcity and therefore each decision involves an opportunity cost. If we spend £1million pounds on one drug then we cannot spend it on other things. Economists can help decide who gets the treatment, but, it is society which needs to decide how much resources are given to health care.

If we want to give everyone access to the latest drugs, no matter what the cost - are we willing to pay the opportunity cost of higher taxes?

When we buy a packet of cigarettes for $8, we may think that this is the personal cost. But, a new study claims the real personal and social cost of smoking a pack of cigarettes is closer to $200. pdf of report - Report by Kip Viscusi and Joni Hersch

To arrive at these statistics they look at the likelyhood of early death from cigarettes. Smoking is generally assumed to reduce life expectancy by a number of years. However, smoking can also reduce quality of life, from an early age. E.g. breathing difficulties.

An economic cost can be placed on each year of life that is lost. This includes lost earnings, lost output, plus a value on social life. At a very rough estimate we may say one year of life is worth $100,000

From these statistics we can get a rough idea of of how much a packet of cigarettes actually costs to the individual.

Thus, it appears that cigarettes are a classic example of a demerit good. It shows that consumers can be very bad at assessing risk and the personal utility of certain goods. This is a justification for higher taxes for consumer on cigarettes. See - should taxes on cigarettes be increased?

In addition to the extra private costs, there are of cause external costs to the rest of society.

hat tip: Freakonomics

Readers Question: Evaluate the case that raising the legal drinking age to 21 will be more effective than other methods for reducing the harmful effects of alcohol. (15 marks) AQA unit 3

• Things to avoid: explaining all the costs of alcohol and negative externality diagrams. The question is about the best methods to reduce alcohol consumption. Basically, the question is: what is best way to reduce alcohol?

Raising the drinking age to 21 will reduce consumption amongst young people because it will be harder to buy alcohol. Also, young people are the most likely group to misuse alcohol; e.g. drinking to excess, which causes accidents, death and health problems. If people start drinking later in life, they may be more likely to drink in moderation and not get addicted at an early age.

However, it will still be possible for young people to drink at home. People will find ways to avoid the legislation e.g. asking older people to buy for them. Nevertheless, it will be more difficult. For example, a 16 year old may not be able to get away with drinking in a pub anymore.

This policy doesn’t address the underlying problem of why people want to drink to excess. For that education may be a better solution; education could  help to explain the dangers of excess drinking and therefore encourage young people to drink moderation.. However, previous education policies have not seemed to be very effective. Young people don’t want to hear lectures from the government about the dangers of alcohol.
Continue reading →