Is There a Costs vs. Benefits Rationale for Government Intervention?

Finally, let’s take a completely didn’t approach to the issue of government intervention into the market for prepared foods and ask if the overall benefits associated with limiting people’s salt intake outweighs the costs of the intervention.

Assume that the government’s intervention will indeed lead people to consume less salt in their diet.  This is surely not a given, since people can simply add their own salt to the prepared foods they buy, among other possibilities.  And assume that because people consume less salt, they suffer fewer health problems associated with high blood pressure, and thus use less medical care.  What’s the value of better health and/or a longer life?  In a previous blog entry I discussed how the government places a higher value on the average life than the market does.  Surely the government’s actions here also overvalue good health for purposes of justifying market intervention. Regardless, the actual value created here is that associated with

• lower healthcare costs and/or
• living a few extra years and/or
• living more years in better health.

The costs associated with lower government-mandated salt intake include:

• From the article: “While agreeing that reducing salt is likely to lower average blood pressure, they [some medical researchers] say it can lead to other physiological changes, some of which may be associated with heart problems.”
• The costs to suppliers of prepared foods associated with re-engineering their foods to contain less salt.
• Lower profits associated with fewer sales and/or lower prices due to less demand from consumers who prefer prepared foods with high salt content.
• The lost value (utility) associated with consumers not being able to eat what they prefer.