Low fast-food prices make teenagers fat

How do food prices affect body fatness of teenagers aged 12 to 18? This is the research question raised by Michael Grossman, Erdal Tekin and Roy Wada in a new IZA discussion paper. The authors use regional differences in prices for certain types of food in the United States to examine whether there is an effect on clinical measures of obesity, such as the body mass index or the percentage body fat. The findings are as follows: higher prices of fast-food restaurants decrease body fatness among youths. Moreover, teenagers lose weight if the price per calorie for food consumed at home goes up. In contrast, an increase in the price of fruits and vegetables increases obesity. The results have important implications for policy makers willing to prevent or reduce childhood obesity: a tax on meals purchased in fast-food restaurants or a subsidy to the consumption of fruits and vegetables would lead to better obesity outcomes among teenagers.