Tuesday, June 15, 2010

Incentivizing healthy behaviors

Yesterday's Room for Debate blog included a discussion of financial incentives for individuals to engage in healthy behaviors, like lose weight, quit smoking, and exercise. Kevin Pho cites two studies, one in JAMA and one in NEJM, but his critique is that the NEJM study on smoking cessation includes a racially homogeneous sample. The other sample is smaller but more diverse.

Arthur Caplan writes about the asymmetries; fast-food providers are completely free to peddle unhealthy food, leaving it to individuals to get it right or wrong on their own. Another option that might place a greater burden on suppliers of unhealthy products would be to tax them rather than subsidize healthy behaviors. We already do this with alcohol and cigarette taxes, of course, but we do not tax fast food.

One of the questions is what kind of behavioral response to expect from taxes or subsidies. One might imagine that people engage in unhealthy behaviors because they are addictive, and their demand for them might be relatively inelastic. Only a very high tax would produce behavioral change. Subsidizing healthy behaviors might be more effective in eliciting a behavioral response because demand might be much more elastic.