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A Theory of LTR Junk-food Consumption

Abstract

LTR junk-food consumption balances the marginal satisfaction with the marginal deterioration of health. An LTR person discounts the instantaneous marginal satisfaction from junk-food consumption by its implications for his survival probability. His change rate of health evaluation is increased (decreased) by junk-food consumption when health is better (worse) than a critical level. The moderating direct effects of age and relative price on junk-food consumption may be amplified, or dimmed, by the change in his health. The stationary health of a person ignoring his age declines with his time-preference rate and rises with the marginal effect of junk food on his intrinsic health-improvement rate.

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File URL: http://www.uow.edu.au/content/groups/public/@web/@commerce/@econ/documents/doc/uow012146.pdf
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Paper provided by School of Economics, University of Wollongong, NSW, Australia in its series Economics Working Papers with number wp03-06.

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Length: 21 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:uow:depec1:wp03-06
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School of Economics, University of Wollongong, Northfields Avenue, Wollongong NSW 2522 Australia

Phone: +612 4221-3659
Fax: +612 4221-3725
Web page: http://business.uow.edu.au/econ/index.html

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Keywords: junk food; health food; relative price; relative taste; risk; natural recovery; full-capacity income; expected lifetime utility; rational consumption; health; health value;

Find related papers by JEL classification:

  • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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  1. Frank J. Chaloupka, 1990. "Rational Addictive Behavior and Cigarette Smoking," NBER Working Papers 3268, National Bureau of Economic Research, Inc.
  2. Olekalns, Nilss & Bardsley, Peter, 1996. "Rational Addiction to Caffeine: An Analysis of Coffee Consumption," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 1100-1104, October.
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  5. Gary S. Becker & Michael Grossman & Kevin M. Murphy, 1990. "An Empirical Analysis of Cigarette Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State 61, Chicago - Center for Study of Economy and State.
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  7. Levy, Amnon, 2002. "A lifetime portfolio of risky and risk-free sexual behaviour and the prevalence of AIDS," Journal of Health Economics, Elsevier, vol. 21(6), pages 993-1007, November.
  8. Karen E. Dynan, 2000. "Habit Formation in Consumer Preferences: Evidence from Panel Data," American Economic Review, American Economic Association, vol. 90(3), pages 391-406, June.
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Cited by:

  1. Yaniv, Gideon & Rosin, Odelia & Tobol, Yossef, 2009. "Junk-food, home cooking, physical activity and obesity: The effect of the fat tax and the thin subsidy," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 823-830, June.
  2. Andreas Drichoutis & Rodolfo Nayga & Panagiotis Lazaridis, 2012. "Food away from home expenditures and obesity among older Europeans: are there gender differences?," Empirical Economics, Springer, vol. 42(3), pages 1051-1078, June.

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