Obesity, Market Failure and Government Intervention.

Obesity

Obesity is accumulation of fat in the body that increases very fast. There are some methods which we can use to measure obesity. One of them is the Body Mass Index (BMI). It is calculated as your weight (kg) divided by your height (metres). Recent establishments show that people of average weight are considered to have a BMI between 18.5 and 25. People who have a BMI of over 30 are con

sidered obese.

Here is some interesting fats about obesity in the UK.

- 70% of men and 63% of women in the UK are overweight or obese.

- Obesity accounts for 30000 deaths a year in the UK.

- Obesity is estimated to cost the British economy over £2bn every year.

- One in five children in Britain eats no fruit at all.

Causation

1) Changing life styles. Some people don't have enough spare time to cook, so they have to buy something in supermarkets or take-away food. Especially workers, who have just one our for linch is likely to use fast food, which is, probably, could cause obesity.

2) The falling real cost of processed foods because of economies of scale. Fast food is always cheaper than fresh food, because companies who sell fast food are operating on the level of economies of scale (large size)

3) Calories.

4) A rise in relative poverty.

5) Bigger portions.

Obama harbours fear of 'double-dip recession.

Today at the press conference The Barack Obama has warned that the US economy could head into a “double-dip recession” unless urgent steps were taken to rein back America’s mounting levels of public debt. The problem is that the unemployment in USA rise to 10.2 per cent, the President said his administration faced a delicate balance of trying to boost the economy and spur job creation while bringing the rising deficit and debt under control.

Trade deficit balloons on car and oil imports.

Britain’s goods trade deficit with the rest of the world rise much more than expected in September to the biggest gap since January, hit by Britain's "cash for bangers" scrappage scheme which has driven a surge in car imports. The Office of National Statistics said today that Britain’s goods rise to £7.2 billion pounds in September from £6.1 billion in August, well above analysts’ expectations for the deficit to remain at £6.1 billion. Today's dire figures emerge ahead of key employment data tomorrow and after official estimates for third quarter gross domestic product (GDP) last month showed that Britain was still in recession. The trade deficit had been narrowing in recent months as economists and policymakers speculated that the weakness of the pound was boosting British exports and helping to rebalance the economy.

Car sales rise by 31.6% on scrappage scheme.

The biggest monthly increase was in October, when sales jumped by 31.6 per cent. Some 168,942 new cars were registered last month, up from 128,352 the year before, as sales of vehicles to private buyers increased by 86 per cent to 89,532, according to The Society of Motor Manufacturers (SMMT). Unfortunately sales of fleet cars decreased by 2 per cent to 74,445 because company cars are rarely old enough to qualify for the Government scrappage scheme, where owners of vehicles that are more than ten years old receive a £2,000 discount on a new model by trading in their old one.

House prices record first rise in 19 months.

The prices in Britain for houses are higher than they were a year ago, in the first annual house price rise for 19 months. New figures from Nationwide show that during October, house prices rose by 2 per cent compared to the same month last year, signalling the first annual rise since March 2008. However, the monthly pace of growth is slowing, with house prices rising by 0.4 per cent in October, compared to 0.9 per cent in September and 1.4 per cent in August. Prices have been slowly rising on a monthly basis since May. Nationwide said that this could be due to more sellers returning to the market, creating more competition