The Externalities of Hamburgers

Adam Ozimek , Contributor

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Mark Bittman has a piece in the New York Times where he analyzes the “true cost” of hamburgers. There are some things right with the piece and some things wrong. In general, thinking about the costs of meat consumption is important, and casting the discussion in economic rather than moral terms is a step in the right direction. Although to be fair, to ask an individual to change their decisions based on externalities is of course inevitably a moral and not economic appeal. But the economics are a good place to start, especially if people with a wider range of ideological backgrounds are to be convinced.

I’ll start with some of the bad. First, he tries to frame the discussion as one of externalities, and does a decent job defining them:

Whatever the product, some costs are borne by producers, but others, called external costs — “externalities,” as economists call them — are not; nor are they represented in the price. Take litter: If your cheeseburger comes wrapped in a piece of paper, and you throw that piece of paper on the sidewalk, it eventually may be picked up by a worker and put in the trash; the cost of that act is an externality. Only by including externalities can you arrive at a true cost.

Unfortunately, he relatively quickly tosses aside the actual definition and begins including things that aren’t actually externalities. For example, health costs:

The calculable chronic disease costs are similar. There’s some evidence that red meat intake may increase risk of cardiovascular disease and mortality, but like many of the speculative externalities discussed below, it’s impossible to assign a cost to this. (If red meat were further implicated in cardiovascular disease, the true costs of a burger would rise significantly.)

I think what has happened here is that Bittman has taken the fact that externalities are not included in the price of a burger and then incorrectly assumed that all costs not included in the price are externalities. It is true that the cost is not directly included in the price if an individual eats unhealthy food, gets unhealthy, and sees their medical expenses go up. But depending on who pays for their healthcare, this cost could entirely be born by the person eating poorly, which means it is not an externality.

Another issue in his piece is the lumping together of unhealthy meat consumption with a general dislike of industrial food:

And all the products of industrial food consumption have externalities that would be lessened by a system that makes as its primary goal the links among nutrition, fairness and sustainability.

English: McDonald’s Hamburger in Japan (Photo credit: Wikipedia)

This first weird thing is that he throws fairness into this mix. What is he even talking about here? Would the externalities of meat consumption be lower if farm workers received a higher wage? Sure, a small amount less might be consumed due to higher prices, but this would amount to a trivially small tax. Second, he again includes nutrition into the mix as an externality problem. I am curious whether Bittman actually wants to deal with the economic cost of bad nutrition in an efficient way, which would be to tax unhealthy people in proportion to the part of their healthcare that government pays for. I would guess not, which suggests he’s not actually concerned about the externality or efficiency here so much as he wants other people to be healthier per se. The problem is when a healthy person eats a hamburger, there is no health care cost externality.

The problem he should be focusing on is environmental externalities. This economic focus is how he frames his piece, but then he quickly loses sight of that. It’s true that meat has serious environmental externalities. It doesn’t take a zealous liberal to see that, as it is an important point in Tyler Cowen’s book An Economist Gets Lunch. But instead of framing the case more as a wider one that people with both conservative and libertarian beliefs should embrace, Bittman simply can’t help but cast the problem in liberal terms.

I give Bittman credit for trying. His heart is in the right place, and he’s more right than many who disagree with him. The people ignoring the problem of externalities of meat are the bigger problem here than the imperfect advocates. But to really reach out and get a wider range of people to understand this issue it would help if advocates like Bittman did a better job and didn’t let their intense ideological blinders get in the way.