Freakonomics Blog � Does Obesity Kill?

I'm a big fan of the book Freakonomics, and the authors. I really wish I could learn economics from someone like Steven Levitt. The co-author Stephen Dubner posted a blog article about obesity that I found fascinating, and dove-tailed with thoughts I'd been having on corporate America and the way we're pricing healthy foods compared to unhealthy foods.

(Note: I posted this as a comment on the Freakonomics blog, but I'm reposting it here as they're my own thoughts.)

I was going through a Jack-In-The-Box drive-thru the other day, and noticed that their new “Chicken Chibatta” sandwich comes in two versions: Spicy Crispy (breaded and deep-fried) and Grilled. Other than the preparation on the chicken, the sandwiches are otherwise identical.

It’s of little surprise to anyone (sadly) when I tell you that the price of the fried version is $4.39 and the price of the grilled version is $5.99. I have to assume a level of demand is causing the price differential, considering that the fried version must be a higher cost item for the restaurant. I know it’s beyond most corporations to have a conscience, but it seems like they are placing a price premium on the less costly item and I can’t see that demand is the entire cause. Someplace, it’s been decided that the healthier sandwich is a higher value item, so they should price it higher, despite there being far more room for profit.

You see this mentality everywhere … most notably bottled water made from cola companies, where the water is essentially the same water that goes into making the cola. Despite far more cost going into making the cola (sugar, caffeine, etc.), it sells for half the cost of the water. Wouldn’t you want to drive people to the item that costs you less to make, to increase your profits? I understand the “value added” business model, but it’s become ridiculous when you are leaving money on the table.

It’s everywhere … foods that cost more to make (and are unhealthy for you) are selling for pennies on the dollar, and when you are on a limited budget, those are the foods you’re stuck with. It’s almost like a tax on the poor, forcing them to choose unhealthy foods because they cannot afford to eat better.

Technorati tags: Economics, Obesity, Fast Food