A note on evaluating agricultural policy in the presence of health care cost externalities: dairy production quotas and coronary heart disease costs.

摘要

The purpose of this note is to illustrate that the health cost externalities related to food consumption are significant and can be large enough to have implications for the economic evaluation of agriculture and food policy. The individual dietaryintake of fats can affect the probability of being afflicted with coronary heart disease (CHD). While fat consumption is primarily a private decision, much of the annual dollar 7.4 billion cost of CHD in Canada is borne socially through publically funded health care, disability and pension plans. The per-unit disease cost externality from saturated fatty acid consumption in Canada is calculated to be dollar 5.07 per kg of saturated fatty acid. To demonstrate the importance for policy analysis, the disease cost externality was incorporated into a conventional welfare analysis of dairy production quotas in Canada. The externality was large enough to make the restrictive production quotas no further from social optimum that the competitive equilibrium.