Saturday, November 01, 2008

Americans becoming more obese. This paper by Harvard economists David M. Cutler, Edward L. Glaeser and Jesse M. Shapiro highlights the "control" aspects of the problem. As in the cases of information overload or personal asset management or company growth, the ability to orchestrate the flow of goods and services is absolutely critical to the overall success of the system. Its control function or the lack of thereof tends to become the most important limiting or even harmful factor.
While the medical profession deplores the increase in obesity, the standard economic view is the opposite. Lower prices for any good – either monetary or time costs – expand the budget set and make people better off. But self-control issues complicate this interpretation. If people have difficulty controlling how much they eat, lowering the time costs of food consumption may exacerbate these problems. Certainly, the $30-$50 billion spent annually on diets testifies to the
self-control problems that many people face. In the last part of the paper, we consider the welfare implication of lower food production costs in a model where individuals have self-control problems. Such a model helps explain why the increases in weight have been biggest at the upper end of the weight distribution, where self-control problems are the most severe.

A good exercise for the The Magicians and Reverse Brainstorm. A long-term trend/process frames behavior of the system.

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