NCPA - National Center for Policy Analysis

Restaurants, Regulation and the Supersizing of America

October 4, 2010

A popular idea among public health advocates is that eating restaurant food causes obesity.  As a result, concerned policymakers are developing new regulations on restaurants in an effort to fight obesity, say Michael L. Anderson, an assistant professor of agricultural and resource economics at the University of California, Berkeley, and David A. Matsa, an assistant professor of finance at Northwestern University's Kellogg School of Management.  

  • For example, in response to high obesity rates in low-income neighborhoods, the Los Angeles City Council unanimously approved a law in July 2008 banning the opening of new fast food restaurants in a 32 square-mile area containing 500,000 residents.
  • "Calorie posting" laws are in effect in cities such as New York and Seattle, and the recent health care reform bill mandates calorie posting for all chain restaurants with 20 or more outlets.

If large portions and effective marketing lead people to eat more when they go to restaurants than when they eat at home, then these regulations may reduce obesity.  But it is not obvious that the link between eating at restaurants and obesity is causal, say Anderson and Matsa.

  • Detailed analyses of food intake data reveal that, although restaurant meals are associated with greater caloric intake, many of these additional calories are offset by reductions in eating throughout the rest of the day.
  • Furthermore, when eating at home, obese individuals consume almost 30 percent of their calories in the form of "junk food" (ice cream, processed cheese, bacon, baked sweets, etc.).
  • Because obese individuals consume so many calories from nutritionally deficient sources at home, it may not be surprising that replacing restaurant consumption with home consumption does not improve health.

While taxing restaurant meals might cause obese consumers to change where they eat, data suggest that policy initiative such as a tax would be unlikely to affect their underlying tendency to overeat, say Anderson and Matsa.

Source: Michael L. Anderson and David A. Matsa, "Restaurants, Regulation and the Supersizing of America," Regulation Magazine, Fall 2010.

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