Attacking Big Mac

Page Summary

While the hot item on the Congressional menu is President Bush's economic stimulus proposal, others continue to simmer on the back burner. Believe it or not, one of those items is fast food.

While the hot item on the Congressional menu is President Bush's economic stimulus proposal, others continue to simmer on the back burner. Believe it or not, one of those items is fast food. As the annual post-holiday, pre-spring break diet season gets into full swing, we're likely to hear more about what the Surgeon General's report called a national "epidemic of obesity." Last fall, Sen. Bill Frist (R-TN) and Sen. Jeff Bingaman, (D-N.M.), introduced legislation for programs to reduce Americans slim down. President Bush recently suggested that a nation of couch potatoes could best fight fat with 30 minutes of activity daily, but some plaintiffs and lawyers place the blame at the other end of the fork. A Big Mac attack is no laughing matter, they argue; and now they're attacking back.

Carolyn Lochhead, writing for the San Francisco Chronicle, summarized the debate:

PEOPLE OF SIZE, take heart. The fat fight has been joined in Washington and nationwide, with congressional hearings, lobbying blitzes, legislation, presidential fitness decrees, class-action lawsuits, airline restrictions, and, just last week, a ban on sodas by the Los Angeles Unified School District.

. . . Pitted against the food industry are consumer activists and trial lawyers, who are battling for your right to know just how deadly and disgusting triple-decker bacon cheeseburgers and Ding Dongs really are.

The latest class-action salvo was filed in late July, with 270-pound Bronx maintenance worker Caesar Barber charging that McDonald's, Wendy's, Burger King and KFC contributed to his coronaries. "They never explained to me what I was eating," he complained . . . .

The food industry calls the suit silly and says the whole mess began when former Surgeon General David Satcher last December issued a "call to action" declaring a U.S. obesity epidemic.

The surgeon general said 61 percent of adults and 13 percent of children are overweight, and rates are rising at an astonishing pace. Satcher warned that being overweight contributes to 300,000 U.S. deaths a year -- and is fast approaching the 440,000 killed by smoking.

             'Fatuous response to obesity', 1/12/03

The Center for Consumer Freedom, funded by the food industry, scoffs at food nannies and fat police. (See their You're too stupid" ad.) Disagreeing, Professor John Banzhaf of George Washington University law school insists that the issue is serious enough to warrant both judicial and legislative action. Banzhaf was one of the leaders in court battles against the tobacco companies and has now turned his attention to fast food. Responding to suggestions that people choose what they eat and that suing food producers is ridiculous, Banzhaf replied, "That's what they said about the smoking lawsuits". . . . He further insists that the fast food companies themselves know the suits aren't ridiculous. "When the McDonald's french fry [false advertising] suit was filed, 'Everyone laughed and called it ludicrous, but then . . . [McDonald's]. . . settled for $12.5 million and issued a public apology. ' (from 'Fatuous response to obesity', 1/12/03)

Former Surgeon General Satcher's report citing 300,000 deaths caught public and media attention. Others joined Caesar Barber in courtroom attacks on Big Mac:

Three teenagers in New York City . . . filed a class-action lawsuit against McDonald's Corp., saying the fast food chain's food caused them to gain as much as 200 pounds and develop serious health problems including heart disease and diabetes.

The teenagers, whose ages range between 13 and 19, say in court papers that McDonald's inaccurately posted nutritional information and deceptively advertised its products. They also say the restaurant chain used marketing practices such as toy and value meal promotions to entice its patrons to eat the food.

. . . Samuel Hirsch, the attorney representing the teenagers, . . . said his clients ate at McDonald's almost every day for at least five years. One teenager, who is 5-foot-9-inches tall, now weighs 270 pounds; another, who is 5-foot-3-inches tall, now weighs 200.

          'McDonald's marketing cited for teens' obesity', 1/12/03

The class action strategy is reminiscent of the recent Big Tobacco court battles and settlement, but there are significant differences. Last fall, The Christian Science Monitor published an overview of the debate about tobacco and food producers' responsibilities.

Any amount of tobacco consumption is dangerous but everyone has to eat . . . And few if any foods are inherently toxic. . . . What's more, while there were only four or five tobacco manufacturers, there are thousands of food manufacturers and restaurants serving some 320,000 different products . . . People usually smoke one brand of cigarette. They eat in many restaurants and eat the same foods at home. That makes it almost impossible to prove that a person's obesity or health problems are caused by a particular food or restaurant.

As a result, suits such as Barber's that attempt to pin the blame for weight-related problems on specific plaintiffs will run into difficulty in court, says Steven Sugarman, a law professor at the University of California, Berkeley. Suits by state attorneys general to try to recover the cost of treating obese patients, a tactic that's worked with tobacco, also could prove tough.

That's why lawyers are focusing on more modest suits aimed at advertising and marketing techniques, says John Banzhaf III, a George Washington University law professor who helped initiate the tobacco litigation three decades ago.

. . . State consumer-protection laws require sellers to disclose clearly all important facts about their products. Just as a sweater manufacturer should disclose that it may shrink in the wash, Banzhaf says fast-food companies might have an obligation to disclose that a meal has more fat than the recommended daily allowance.

. . . Fast-food restaurant chains, for their part, say they're not hiding what's in their food. At Burger King, for example, nutritional information is supposed to be posted in every dining room. And on its website, Wendy's lists 15 categories of information about its products, including total fat and calories for everything from the whole sandwich down to the pickles.

Nutritionists say that the information doesn't put the calories in a context people can understand. "While they know a quarter pounder is not a health food, a lot of people would be surprised to learn it uses up a whole day of calories for women," says Margo Wootan of the Center for Science in the Public Interest in Washington.

Our national preoccupation with health care and rising health care costs means that the fight over fat is bigger than just whether the fast food companies are telling the whole truth about their products or telling it loudly and clearly enough. Recognizing that highly publicized lawsuits and public health information haven't stopped people from smoking and are unlikely to stop them eating fast food, Prof. Banzhaf (1/12/03) acknowledged that "Some argue that . . . [individuals have] . . . a right to voluntarily engage in unhealthy behaviors, but there certainly is no right to require others to subsidize the huge costs."

Aha! The health care costs. That's where the issue turns from private choice to public issue. The Surgeon General's report estimated those costs at $117 billion, annually. That surely qualifies as "huge." Bahzhof's answer to the question of who's going to pay the huge bill proposes government action beyond elected officials' just telling us to shape up. Writing in the San Francisco Daily Journal last year (1/12/03), Banzhaf asserted that

The principle of "individual responsibility" arguably requires people to bear the consequences and the full costs of their own choices.

. . . [P]erhaps the best way to begin shifting the health costs of obesity to the obese might be to charge them more for health insurance, just as a growing number of companies are charging smokers more following a recommendation by the National Association of Insurance Commissioners.

Another tactic would be to follow the lead of a large number of states which are dramatically increasing the taxes on cigarettes and using part of the proceeds to fund health-related messages. Assessing a special tax on foods high in fat and calories, and using some of the proceeds to sponsor healthy eating messages, might go a long way to counter the billions of dollars spent annually on promoting the sale of high-fat and high-calorie items at fast food chains."

The issues are tangled, but like the few extra pounds gained over the holidays, the fight over fat won't fade away overnight. Fortunately, in trying to sort it out, we have more than just opinion. Economic analysis offers us some helpful tools in deciding whether fast food will become out newest national target in the blame game.

Discussion Questions

  1. Economists argue that individuals make rational choices. Before you offer up as evidence all the irrational things your friends and relatives have done, consider that economists define a rational choice as one in which the decision-maker chooses the alternative that he perceives to have the greatest excess of benefits over costs. Given this definition, is eating fast food a rational choice? Explain.

  2. What are the perceived benefits of eating fast food? What are the perceived costs? Are the costs and benefits the same in all situations? Explain and give examples.

  3. Is there only one rational choice? In other words, is the "rational choice" in a given set of alternatives (like eating a fast food burger or not eating a fast food burger) the same in all circumstances and for all people? Explain.

  4. Note the word "perceives" in the definition of rational choice. What things influence an individual's perception of alternatives? For each item on your list, consider whether or not it is likely to influence people's choices about whether or not to eat fast food.

  5. What do the fast food lawsuits imply about the responsibility of producers like McDonalds in forming people's perceptions? Do you agree? Explain.

  6. We know that evaluating the level of risk plays a role in people's assessments of costs and benefits. For example, a young, athletic parent may not wear a bike helmet but insist that her first-grader do so. The parent believes that her experience and athleticism render the risk of not wearing a helmet very small, but believes the risks to be much higher for her child. Notice, though, that the parent's risk assessment - and her choice about helmets - may change. If a friend is seriously injured in a bike accident, or she reads a safety article, she may re-evaluate the risks, and her willingness to accept the cost of not wearing a helmet.

    How do people's experience and observation of others in their daily lives affect their assessment of the risks (and therefore the cost/benefit analysis) of eating fast food?

  7. Economists identify two types of decisions: all-or-nothing decisions and marginal decisions. "All-or-nothing" speaks for itself. "Marginal" looks at decisions as incremental. It focuses on the next unit, a little more or a little less, rather than totals. When your family considers buying a new car, the decision isn't likely to be "Should we buy a new Mercedes now or not have a car at all?" Instead, you consider the margins: Should we buy the car now, or wait a couple months? New or used? How used? A standard model or an expensive model? What optional equipment?

    • Is eating fast food an all-or-nothing decision or a marginal decision? Explain.
    • How does knowing the type of decision help to explain why people, even overweight people, seem unlikely to stop eating fast food?

  8. The fast food companies insist that the nutritional information about their products is readily available, yet it seems few people pay much attention. Why does the availability of nutritional information seem to have little impact on people's demand for fast food?

  9. Paul Campos, professor of law at the University of Colorado, and author of the soon to be released The Last American Diet, challenges the existence of any scientific connection between obesity and poor health. (1/12/03)

    A careful survey of medical literature reveals that the conventional wisdom about the health risks of fat is a grotesque distortion of a far more complicated story. Indeed, subject to exceptions for the most extreme cases, it's not at all clear that being overweight is an independent health risk of any kind, let alone something that kills hundreds of thousands of Americans every year. While having a sedentary lifestyle or a lousy diet--both factors, of course, that can contribute to being overweight--do pose health risks, there's virtually no evidence that being fat, in and of itself, is at all bad for you.

    . . . In short, the Cornell survey of the existing literature merely confirmed what anyone who actually examines the data will discover: In a decided majority of studies, groups of people labeled "overweight" by current standards are found to have equal or lower mortality rates than groups of supposedly ideal-weight individuals. University of Virginia professor Glenn Gaesser has estimated that three-quarters of all medical studies on the effects of weight on health between 1945 and 1995 concluded either that "excess" weight had no effect on health or that it was actually beneficial. . . . "As of 2002," Gaesser points out in his book Big Fat Lies, "there has not been a single study that has truly evaluated the effects of weight alone on health, which means that 'thinner is healthier' is not a fact but an unsubstantiated hypothesis for which there is a wealth of evidence that suggests the reverse."

    Does (Should) this information change the answer to the question of whether eating fast food is a rational choice?

  10. (Optional ) Prof. Campos also argues that our declining national health isn't caused by what we eat, but by what we do - or more importantly don't do - when we're not eating. To see his full argument on the effects of sedentary lifestyles, see "Weighting Game - What the Diet Industry Won't Tell You." (1/12/03) Read the full article or the handout provided by your teacher.

    Economics teaches that incentives influence people's behavior. Incentives are rewards (positive incentives) or punishments (negative incentives).

    1. Note the IRS ruling mentioned in the Campos article. In terms of incentives and the behavior of various individuals and groups involved in the controversy, does it matter whether obesity is considered a "disease" rather than just the result of a lifestyle choice? Why or why not?

    2. Predict the likely response of the following groups to the incentives that accompany the designation of obesity as a disease:
    • Obese people
    • Overweight people
    • Diet industry companies
    • Health insurers
    • Personal injury lawyers
    • Legislators
    • Fast food producers

Teacher's Guide

If you're starting a new semester, choice, cost and incentives are the foundations upon which you'll build students' understanding of the economic way of thinking. The fast food controversy is a topic students come to with a great deal of background knowledge and experience, so they're likely to enter the discussion willingly. In addition to allowing them to practice economic analysis in a familiar "setting," it's an opportunity to show them how economic thinking can inform discussions that might otherwise degenerate into taking sides and invoking the "right to my opinion."

  • Copy pages 1-4 (pages 5 and 6 are optional) from the MS Word version of this document
  • Ask students to read "Attacking Big Mac" for homework or in class
  • Divide the class into small discussion groups to consider questions 1 through 9
  • Reconvene the large group to report out. Use the opportunity of the large group discussion to reinforce the economic concepts introduced in the questions
  • (optional) Debate the question: "Is the Attack on Big Mac" justified? Set as a ground rule for the debate that economic thinking must be used and that you will interrupt the debate to ask the speakers to explain their statements in terms of their understanding of rational choice, costs and benefits, and incentives.

If your students are well into their study of economics and are comfortable with rational choice and cost/benefit analysis, you may wish to focus your discussion on the Campos article (with question 9 and optional question 10). Public choice theory teaches us a great deal about the incentives that operate in the public policy arena, and students can look at how the distribution of costs and benefits is likely to influence if and how Congress will address the issue of obesity.

  • Copy pages 1-7 and handout pages 1-4. Ask students to read the handout and work through questions #1-9 for homework or in a group discussion.
  • In large group, clarify misunderstandings and answer questions.
  • Introduce or review with students the basics of public choice and how incentives operate in the public arena.
  • Handout pages 5-7. Allow students time to read the excerpt from the Campos article. OR Assign students to read the entire article online, either before or during class.
  • Assign small discussion groups to consider questions 9 and 10.
  • Debrief in large group discussion

Resources used in preparation of this hot topic:

Discussion Questions

  1. Economists argue that individuals make rational choices. Before you offer up as evidence all the irrational things your friends and relatives have done, consider that economists define a rational choice as one in which the decision-maker chooses the alternative that he perceives to have the greatest excess of benefits over costs. Given this definition, is eating fast food a rational choice? Explain.

    Yes. The person choosing to eat the fast food perceives that the benefits outweigh the costs. (Note that just because you don't agree with the choice doesn't mean that it isn't rational.)



  2. What are the perceived benefits of eating fast food? What are the perceived costs? Are the costs and benefits the same in all situations? Explain and give examples.

    The benefits of fast food may include taste, convenience, price, availability, the social atmosphere. Accept a variety of answers. The costs may include the same things: taste, lack of convenience, price, availability. Expect students to also include as costs things like giving up eating more nutritious foods, making it harder to stay on a diet, weight gain. Again, accept a variety of answers. Note that the costs and benefits aren't the same in all situations or for all individuals. Given the focus of the article, a good example here is to point out that we all know people who eat fast food and don't gain weight or get sick, and we know people who eat more "healthy" food and do gain weight or have heart problems.

  3. Is there only one rational choice?

    No. Whether or not a choice is rational in the economic sense is determined by the chooser perceiving that benefits outweigh the costs. And, of course, by that definition, ALL choices are rational. For economists, that means the important thing in examining people's decisions is figuring out how the decision makers perceived the costs and benefits of the alternatives.

    In other words, is the "rational choice" in a given set of alternatives (like eating a fast food burger or not eating a fast food burger) the same in all circumstances and for all people? Explain.

    Students may offer a variety of examples. In each case refer them to the decision-maker's perceptions. Expect that someone may say that it's not a rational choice for an overweight person to eat a Big Mac. Challenge this by asking about the perceived costs and benefits. A good follow-up question might be to ask what might change the person's perception of the costs and benefits.



  4. Note the word "perceives" in the definition of rational choice. What things influence an individual's perception of alternatives?

    Personal tastes and values. Availability of information. Accuracy of information.

    For each item on your list, consider whether or not it is likely to influence people's choices about whether or not to eat fast food.

    Emphasize the important role of information in decision-making and that information can come from a variety of sources: an individual's experiences and observations, advertising, research, etc. And, of course, even when they have lots of information, people's tastes and values filter and shape their acceptance of it.



  5. What do the fast food lawsuits imply about the responsibility of producers like McDonalds in forming people's perceptions? Do you agree? Explain.

    The lawsuits charge fast food sellers with a great deal of responsibility, but notice that no one seems to be implying that they shouldn't be offering people the choice of eating fast food. Instead, they claim the food producers' are responsible for providing complete, accurate and clearly understandable information (through advertising and product labels or warnings.)

  6. We know that evaluating the level of risk plays a role in people's assessments of costs and benefits. For example, a young, athletic parent may not wear a bike helmet but insist that her first-grader do so. The parent believes that her experience and athleticism render the risk of not wearing a helmet very small, but believes the risks to be much higher for her child. Notice, though, that the parent's risk assessment - and her choice about helmets - may change. If a friend is seriously injured in a bike accident, or she reads a safety article, she may re-evaluate the risks, and her willingness to accept the cost of not wearing a helmet.

    How do people's experience and observation of others in their daily lives affect their assessment of the risks (and therefore the cost/benefit analysis) of eating fast food?

    There are lots of people in fast food restaurants and they are not all obese or even overweight. That experience may help people maintain the perception that the risks are low.



  7. Economists identify two types of decisions: all-or-nothing decisions and marginal decisions. "All-or-nothing" speaks for itself. "Marginal" looks at decisions as incremental. It focuses on the next unit, a little more or a little less, rather than totals. When your family considers buying a new car, the decision isn't likely to be "Should we buy a new Mercedes now or not have a car at all?" Instead, you consider the margins: Should we buy the car now, or wait a couple months? New or used? How used? A standard model or an expensive model? What optional equipment?

    • Is eating fast food an all-or-nothing decision or a marginal decision? Explain.

      Eating fast food (in fact, eating anything) is a marginal decision. The individual is always deciding whether to take the next bite. The decision is "Do I want a cheeseburger?" not, "Am I going to eat 10,000 cheeseburgers in my life?"

    • How does knowing the type of decision help to explain why people, even overweight people, seem unlikely to stop eating fast food?

      Eating any one cheeseburger doesn't make a person fat, and not eating any one cheeseburger doesn't keep a person from becoming fat. Accusatory statements about overweight people making poor choices overlook the importance of the marginal nature of eating decisions.



  8. The fast food companies insist that the nutritional information about their products is readily available, yet it seems few people pay much attention. Why does the availability of nutritional information seem to have little impact on people's demand for fast food?

    Day to day eating decisions are marginal. Should I have that cookie or that hamburger or that sandwich? There is nothing inherently wrong with "that" cookie, or "that" hamburger; they have some nutritional value and even the list of ingredients doesn't show anything as harmful or poisonous. So, the nutritional information doesn't change the perception of the benefits of eating the hamburger. (This may be one reason that many diet plans try to change the margin of food decisions - by having people plan for an entire week, for example, or writing down everything they eat.)



  9. Paul Campos, professor of law at the University of Colorado, and author of the soon to be released The Last American Diet, challenges the existence of any scientific connection between obesity and poor health. (1/12/03)

    A careful survey of medical literature reveals that the conventional wisdom about the health risks of fat is a grotesque distortion of a far more complicated story. Indeed, subject to exceptions for the most extreme cases, it's not at all clear that being overweight is an independent health risk of any kind, let alone something that kills hundreds of thousands of Americans every year. While having a sedentary lifestyle or a lousy diet--both factors, of course, that can contribute to being overweight--do pose health risks, there's virtually no evidence that being fat, in and of itself, is at all bad for you.

    . . . In short, the Cornell survey of the existing literature merely confirmed what anyone who actually examines the data will discover: In a decided majority of studies, groups of people labeled "overweight" by current standards are found to have equal or lower mortality rates than groups of supposedly ideal-weight individuals. University of Virginia professor Glenn Gaesser has estimated that three-quarters of all medical studies on the effects of weight on health between 1945 and 1995 concluded either that "excess" weight had no effect on health or that it was actually beneficial. . . . "As of 2002," Gaesser points out in his book Big Fat Lies, "there has not been a single study that has truly evaluated the effects of weight alone on health, which means that 'thinner is healthier' is not a fact but an unsubstantiated hypothesis for which there is a wealth of evidence that suggests the reverse."

    Does (Should) this information change the answer to the question of whether eating fast food is a rational choice?

    No. The economic answer is that IF a person chooses to eat fast food, it's always a rational choice. Economists believe that ALL choices are rational choices. However, this information may change people's perceptions of the costs of choosing to eat fast food.


  10. (Optional ) Prof. Campos also argues that our declining national health isn't caused by what we eat, but by what we do - or more importantly don't do - when we're not eating. To see his full argument on the effects of sedentary lifestyles, see "Weighting Game - What the Diet Industry Won't Tell You." (1/12/03) Read the full article or the handout provided by your teacher.

    Economics teaches that incentives influence people's behavior. Incentives are rewards (positive incentives) or punishments (negative incentives).

    1. Note the IRS ruling mentioned in the Campos article. In terms of incentives and the behavior of various individuals and groups involved in the controversy, does it matter whether obesity is considered a "disease" rather than just the result of a lifestyle choice? Why or why not?

      Yes, it matters. The IRS ruling decreases the costs of obesity. ( Or, you could look at it as increasing the benefits of obesity.) Economics tells us to expect that there will be an increase in the choices that could lead to obesity. We can also predict pressure to increase the number of people who can reap the benefits of being obese. For example, it wouldn't be surprising to see the weight qualifications for "obese" status change to become more inclusive. At the margin, we might even see the unintended result in which overweight people gain more weight to become obese before entering a diet program! (Would you rather be very overweight and not get a tax break or obese and get a tax break?)



    2. Predict the likely response of the following groups to the incentives that accompany the designation of obesity as a disease:
    • Obese people

      The IRS ruling reduces the costs of getting treatment, so we'd predict an increase in people entering treatment. (Note that this doesn't predict a decrease in obesity.)

    • Overweight people

      The IRS ruling may actually make it cheaper to lose weight if you gain more first.

    • Diet industry companies

      Expect these companies to spend time, energy, and money trying to strengthen the case for the tie between obesity and health risks.

    • Health insurers

      Expect these companies to spend time, energy, and money to challenge the link between obesity and health risks. If obesity is a disease, they will face great pressure to cover its treatment.

    • Personal injury lawyers

      Expect increasing numbers of lawsuits. Diseases cause harm and if obesity is legally a disease, lawyers will be able to recover damages for their clients.

    • Legislators

      Will probably face increased pressure from constituents to pass legislation dealing with the issue. Public choice theory leads us to expect that the relatively organized diet industry and advocacy groups for the obese will be more able to exert pressure than the relatively disorganized mass of taxpayers who would bear the cost of legislation and programs that benefit the obese.

    • Fast food producers

      If the designation of obesity as a disease is accompanied by public perception that fast food is to blame, then expect the fast food industry to acquiesce in demands for more labels and warnings, even with the higher costs and prices they'll bring.