The Skinny Bill and Common Twiggy Policy, Part I

At the beginning of last month (employment opportunity and relocation has postponed work on the blog), Mark Bittman wrote an opinion piece for The New York Times titled “A Food Manifesto for the Future” that has brought me back to the topic of obesity.

Bittman outlines many policy solutions that, he believes, will achieve a healthy and safe American diet. One is the abolishment of agricultural subsidies and is where I want to begin walking you through my thought process behind the causes of obesity.

Agricultural subsidies are, perhaps, the most contentious international and domestic policies in both the U.S. and EU. The Farm Bill in the U.S. and the Common Agricultural Policy (CAP) in Europe are multi-year frameworks outlining government expenditure in the billions. They have the backing of politicians and strong lobbies. The farm lobby in Europe is, arguably, the most influential interest group. Many countries who consider themselves allies find themselves coming to blows during trade negotiations over these market distorting subsidies and tariffs that are contrary to the goal of the World Trade Organization (WTO), free trade.

This post could easily spiral out of control by attempting to determine causes of obesity and by giving a comparative analysis of agricultural policies, so I've decided to divide it into two parts. In Part I, I will explore some possible causes of the obesity epidemic (outside my previous speculations) and Part II will consider the cost of my own diet and where government subsidies or taxes may have a role in discouraging you from pulling into a McDonald’s drive-thru.

The Organization for Economic Cooperation and Development (OECD) compiles a number of statistics for its members regarding their agricultural policies. The most important and useful data available are Producer Support Estimates (PSE). PSE indicate how much each state spends to prop up and protect its agriculture sector (complete information on PSE is available here). With Bittman calling for the elimination of these subsidies, I began to wonder why the U.S. is so obese when our Farm Bill is small relative to Europe’s CAP, and why Europe’s love handles are becoming ever more pinchable as CAP spending is ramped down.

Here is the result of a correlation between farm spending and adult obesity prevalence. Disclaimer: This is an obvious case of correlation, not causation (a favorite example of one of my IR professors was ice cream sales and murder rates), but I believe it is an interesting observation and one that we can learn from.

Using statistical software (I lack the means of computing rudimentary arithmetic without a calculator), we can see the negative correlation between these two phenomena is strong (the two-sample t-test was .022 for those statistically inclined). Using another tool, linear regression, provides us with a linear equation ( y=-.65x+23) that can be seen by the line of best fit in the scatter plot. With this equation we can create hypothetical examples outside the observed cases.  The Adjusted R Square tells us that the independent variable, farm subsidies in this case, accounts for 36.5% of the variance (change in obesity prevalence), a large amount.

Now for a hypothetical application…

According to this model, we can see that if you spend one more dollar per person on farm subsidies you will lower your country’s obesity rate by .65%, and looking at the line of best fit tells us that if you spend around $1000 per capita you can eliminate 36.5% of your obesity problem. In the U.S. this would take government expenditure amounting to $30.6 trillion and would lower the obesity rate from 33.9% to 21.2%.The EU on the other hand would have to spend $120.8 trillion, or about 200% of global GDP, to lower their rate to 9.2%.  And we thought the farm lobby was strong now…

But these models, which were the bane of my undergraduate existence, are only as strong as the data you put in. In this case, I accounted for no other variables except farm subsidies.

To propose any budget increase, in this time of austerity, would be political suicide, let alone an item as absurdly large as the model dictates, but the relationship raises an interesting question: How is the free market affecting our diet as countries continue to tear down protectionist policies? Which in turn asks the causal question: Are countries that are the most free the most obese?

To roughly examine the second question, one of the many indexes available that evaluate freedom will be of much help. For our purposes, I chose to use the Heritage Foundation’s Index of Economic Freedom (liberals may cringe at the use of a conservative think tank as a source, but as Jamie Whyte reminds us in Crimes Against Logic, a book I highly recommend, it is a logical fallacy to assume that Heritage’s motivations make the index a less valuable resource. Be skeptical, but don’t disregard). The index measures 10 components of economic freedom, such as trade freedom and property rights and based on those 10 components rates a country from 0 to 100 (more information here).

As before, correlation tests can be run to explore the relationship between these two phenomena. Below is a scatter plot of 86 countries.

It is obvious that there is no significant relationship. Even when only the developed world is tested, no correlation is revealed. So, we can conclude that there is no relationship between economic freedom (as defined by the Heritage Foundation) and obesity.

Maybe the obesity epidemic has nothing to do with freedom, but rather how much time we spend working. Certainly the Protestant work ethic forces us to consume copious amounts of fast food because we live to work and the poor have to work 2+ jobs to stay afloat?

While it appears there could be a relationship between these variables when the outlier Korea is removed, a t-test produces a p-value of .191 indicating that the correlation is not significantly different than 0 (sorry for the statspeak), or simply put, there is no association between the two variables.

If it’s not hours worked annually, is it the type of jobs we work in the U.S. relative to other countries? Do the poor work more “blue collar” jobs and are more exhausted from their work which accounts for poor food choices?

This is hard to evaluate. The U.S. labor market has been undergoing a transformation from manufacturing to services, with around 80% of jobs now located in the latter. The same is true of Europe, but a slightly lower proportion depending on the country.  One might think that this shift would cause jobs to be less physically demanding by generating more "white collar" jobs, but think of landscapers, janitors or roofers, they all provide services. Even to speculate whether this structural shift in the labor market has made jobs less laborious would be imprudent on my part. It's nearly impossible to determine who works "harder" and if that influences the time they spend on preparing food. A survey would need to be conducted.

This will wrap up Part I and has hopefully given you some food for thought as we scratched the surface of the causes of obesity. 

To sum up what may have been a confusing post, but has given you a glimpse into my thought process: 

There is a strong negative correlation between farm subsidies and obesity rates, is this a causal relationship? No, but it is an area to be explored in more depth. There is no relationship between economic freedom and obesity rates, so how has capitalism affected world diets? Hours worked annually also yields no significant correlation with obesity, but could it be possible that the type of jobs people work are determinate of how obese they are?

In Part II of this post we will look into my personal diet, the daily cost to eat healthy and review some literature to examine if there is a justification for government intervention to force us to fit into our bathing suits come summer.