Matthew Metzgar, M.B.A., Ph.D. presenting at the 2nd annual Ancestral Health Symposium (AHS12).
Of the thousands of food commercials that children see every year, less than 1% are commercials for fruits and vegetables. This large
differential in advertising follows from the different economic
structure of the markets.
Simple commodity foods, such as fruits and vegetables, are relatively
similar and can be modeled as a perfectly competitive market. Processed
foods with their many manufacturer variations are modeled as
monopolistic competition. Economic theory predicts that little
advertising takes place under perfect competition, while heavy
advertising takes place under monopolistic competition. Analysis of food
commercials shows just this trend.
Advertisement of processed foods increased demand and consumption. This
consumption has helped contribute to a worldwide expansion in obesity.
This paper simulates how a complete ban on food advertising would affect
social welfare. An advertising ban would reduce producer surplus within
the processed food market, but the resulting lowered consumption of
processed foods may reduce public health care expenditures. A
microeconomic analysis is presented that details the predicted changes
in food consumption patterns, obesity, and health care expenses from a
ban on food advertising.
Bio:
Matthew Metzgar, Ph.D., is a Clinical Assistant Professor of Economics
at the University of North Carolina Charlotte. He has recently
published on the feasibility of the Paleo diet for low-income consumers,
and on the negative impacts of grains on population subgroups.
