Thursday, June 25, 2009

Obesity and advertising

The Age reports that

Australia's fast food industry has agreed to a voluntary code to govern the way it markets products to children.

The code sets new nutrition standards for the foods featured in television advertisements, and other marketing efforts, which target the under-14s.

Seven fast food chains - including McDonald's and KFC - have signed up to the initiative, which will also dictate how they can interact with schools while requiring improved nutrition information disclosure to parents.

An article last year in the Journal of Law and Economics estimated the effects of television fast‐food restaurant advertising on children and adolescents with respect to being overweight in the United States. The paper reported that a ban on these advertisements would reduce the number of overweight children ages 3–11 in a fixed population by 18 percent and would reduce the number of overweight adolescents ages 12–18 by 14 percent.

The voluntary code is clearly less costly in welfare terms than an outright ban on advertising, as it does not impose significant welfare costs on those children and adolescents who consume fast food in moderation and may benefit from the provision of information. The report suggests that the code appears to apply to a range of "marketing efforts" (perhaps including radio and magazines?) and not simply television advertising, which is important given the potential for media substitution (although it could be argued that television advertising is relatively effective when it comes to youth consumption choices).

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