Obesity in America: A Market Failure?

AuthorThomas A. Hemphill
Published date01 December 2018
Date01 December 2018
Business and Society Review 123:4 619–630
© 2018 W. Michael Hoffman Center for Busi ness Ethics at Bentley Uni versity. Published by
Wiley Period icals, Inc., 350 Main St reet, Malden, MA 02148, USA, and 9 600 Garsington
Road, Oxford OX4 2DQ, U K. DOI: 10.1111/basr.12157
Obesity in America: A Market
Fa ilure?
Since the late 1980s, obesity in Americ a has been a loom-
ing public health concern. Recently, medical resea rchers
found that, for the 2011-12 period, 35.3 percent of U.S.
adults (aged 20 or older), 20.5 percent of teenagers (ages
12-19), 17.7 percent of children (ages 6-11), and 8.4 per-
cent of young children (ages 2-5) have obesity, and 6.3
percent of U.S. adults having severe obesity. In a recent
working paper by Ka rnani, McFerran, and Muk hopadhyay
(2015), these management scholars arg ue that obesity
represents a market failure. In thei r study, Karnani et al.
evaluate the effectiveness of corporate social responsibil-
ity, industry self-regulation, social activ ism, and govern-
ment regulation as to its effectiveness on consumer
behavior and reducing obesity. Karna ni et al. are advo-
cates of “reasonable” government intervention, i.e., tax/
subsidies, market regulation, and education, to address
the public health issue of obesity. However, evidence
shows that reasonable government intervention is a lso
vulnerable to government fai lure and potential public
health risk. Recommended is a m ix of institutional
Thomas A. Hemph ill is David M. French Dist inguished Professor of St rategy, Innovation and
Public Policy, School of M anagement, Uni versity of Mich igan-Fli nt. E-mail: t homashe@um-
fli nt.edu.

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