The Obesity Epidemic is not a Policy



Write your assignment as a business essay (use headings) with an introduction, body including
sections related to the parts of the question, and conclusion. Use in-text references when you include
information from sources. Add a reference list (one textbook and at least four scholarly articles) after
the conclusion. The word count (1,000 to 1,200 words) is measured from the introduction heading to
the end of the conclusion.




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In this paper, the theory of externality in regards to fast food industry has been detailed. This paper highlight the supply and demand diagram, the suggestion to remove the externality through subsidy or through tax and at the end conclusion. In order to complete this paper, secondary data has been analyzed and referred. 


Theory of Externality 


In economic aspects, an externality is a benefit or cost that influences a gathering who did not bring about that benefits or cost. Business analysts regularly ask governments to receive arrangements that "disguise" an externality, with the goal that expenses and advantages will influence for the most part parties who cause them. In economic an outcome of a modern or business activity which influences different gatherings without this being reflected in advertising costs, for example, the fertilization of encompassing yields by honey bees kept for nectar (Lin, S. A. 2014).
Externality in Fast Food 
Externalities are the market dissatisfactions. The cost that is not borne by the on-screen characters in a particular trade which turns the impression of danger. Externalities can be negative or can be positive. From economist viewpoint, negative externalities are incurred significant damage that is infeasible to charge to not give. This infers the market can't bolster the externalization of costs without at last crashing and burning.
It is alarming to say that fast food obesity is now one of the world’s leading epidemics (Caballero. B 2007). The poor consumption habit of the consumer is causing many health issues to the society. Which is not good for the society. Fast food is putting a negative impact on the individual health and society at large.


Negative externalities 


Production- MSC is greater than MPC so fast food is being underpriced and overproduced 
Production- Fast food or junk food has a huge demand in the market. Which is forcing the supplier (farmer) to produce more and more numbers of a product such as vegetables, tomatoes. So for this farmer are using green plastic and other material which are affecting the environment in a negative way (Rawhouser et al., 2017). Factories are emitting carbon in an excessive amount which is creating a global warming. 
Consumption- MSB is lower than MPB hence underpriced and over consumed.
Consumption- Money paid by the taxpayer will be spent on the health care. Due to the poor habit of fast food consumption, people feel low self-esteem due to obesity so for this they need counseling which is paid by the government (Fortin, B.  And Yazbeck, M. 2015). 


Positive externalities


Production- Positive externalities of Fast Food market is that third-party inspection of regulations set by the government. Helping transportation and shipping companies globally. Waste from fast food industry can be used to generate the energy at home.
Consumption- The positive externalities is that individual can give more time to work rather for a break. Fast food gives instant energy within less time. It leads charities under companies' name. Fast food market creates third party employment in particular area. Fast food market has many positive externalities as it creates employment of the third party in the particular area which raises the economic standard at large. It helps the other organization such as Gyms and enables the Psychologists to earn enough amount of revenue.




To remove negative externalities- imposing the tax is beneficial
In order to avoid the negative effects of the fast food market and its consumption government should put tax which makes the burger and other fast food product or item costly and less approachable. In order to minimize the fast food consumption or to remove the externalities negative advertisement of fast food item should be carried out. Proper Campaigns that is awareness campaigns should be followed in order to aware the public about obesity and fast food. The government should try to ban the advertisement regarding the fast food. Imposing a tax on being obesity. 
The government should ban Tran's fats and put a tax on fast food. The government should ban and impose a heavy tax on core items or ingredients of fast food production. Restricting the fast food in positioning itself in the market and implementing strict control over advertising. 
For positive externalities- subsidy should be provided by the government in order to uplift and promote the fast food market and industry.




At the end of the paper, it can be concluded that externalities mainly occurs when an individual takes some action which directly affects other individual welfare, but this effect does not operate through prices. In case of fast food market product, it also creates both positive as well as negative externalities in the society. Fast food product such as burger has a huge demand in the market which is causing negative as well as positives externalities or impact on the overall society. As through huge consumption of burger, it creates employment opportunity in the market for Fast Food, extensive consumption of Fast Food create obesity problem which requires treatment which increases the income of the Doctors and other Gyms. Whereas the negative externalities which are hampering the overall society are fast Food industry or market is polluting the environment in many ways. Due to intensive consumption and demand farmer is forced to produce the vegetables and tomatoes in large quantities. So for this farmer are using various plastic and substance which is, directly and indirectly, harming the ecological balance of the environment. The Fast Food industry is producing an excessive amount of carbon and other harmful gases which is depleting the ozone layer and causing many other environmental problems.
So in order to remove the externalities which are hampering the economy and environment at large various corrective measure should be taken by the government. In a way to reduce the negative impact or consequences of the extensive Fast Food Consumption government should Ban the advertisement of Fast Food and impose heavy Tax on the core Item of the Fast Food. Regulating the awareness campaigns in a way to aware the public about obesity and other health issues. Imposing tax and penalty for being obesity, and controlling the advertisement policy may reduce the extensive consumption pattern of the Fast Food. Whereas for positive externalities government should provide subsidy and other benefits to the industry and should reduce the tax on Fast Food may promote the industry as well as increase the demand for consumption of Fast Food. 




Lin, S. A. (Ed.). (2014). Theory and measurement of economic externalities. Academic Press.
Caballero, B. (2007). The global epidemic of obesity: an overview. Epidemiologic reviews, 29(1), 1-5.
Fortin, B., & Yazbeck, M. (2015). Peer effects, fast food consumption, and adolescent weight gain. Journal of health economics, 42, 125-138.
Rawhouser, H., Cummings, M., & Newbert, S. L. (2017). Social impact measurement: Current approaches and future directions for social entrepreneurship research. Entrepreneurship Theory and Practice, 1042258717727718.
Lusk, J. L., & McCluskey, J. (2018). Understanding the Impacts of Food Consumer Choice and Food Policy Outcomes. Applied Economic Perspectives and Policy, 40(1), 5-21.


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