Pollution Due To Urbanization

New Budget for the Sugar Drinks Company

The over consumption of sugar is proving to be a market failure because the consumers of these drinks have increased exponentially and that is because of the low cost of sugar drinks in the country. Some sugary drinks are cheaper than water so the common man devour these drinks rather than the healthy drink they can be having like water. Due to the surplus amount of these sugary drinks provided in the market it is turning out to be a market failure for the government.

A market failure is a simple misallocation of their resources; the goods are over produced due to which the government has to step up to reduce the quantity of that good.

There are different types of market failure when it comes to obesity:

·         The first market failure is caused by people making poor decisions due to insufficient knowledge as to how much sugar, fat, salt maybe present in the food.

·         The negative externalities caused by the over consumption of the market, obese people do not have the proper judgment as  to what their action might lead to making it cost effective the third party. Like this case where the third party is required to pay additional amount of taxes which may have been spent in helping the obese people through health care and other possible benefits!

One of the consequences of obesity is that because of their weight and size they are incapable of working that is they cannot find regular jobs and due to this they are entitled for some sort of benefit payment form the government which means they are not putting any work in the society but are rather taking from it, this is a market failure because they have chosen how they are. But the major market failure of obesity would be being a huge cost to the NHS, as obesity leads to diseases such as type two diabetes, heart diseases, arthritis it is up for debate that they use the NHS by being freeloaders as they are using the public’s hard earned money that they give in taxes for their own use.The new tax seeks to help and put a stop to diabetes which is the eighth leading cause of death all around the globe, the fourth leading cause of death in USA and the numero Uno cause in Mexico.  As obesity is a major cause of diabetes the Mexican government seeks to eliminate this disease which has taken so many lives from its root that is obesity! "This is an intervention which we hope is both going to send a powerful message to consumers that these drinks don't have a place in a healthy diet, but secondly it's an incentive to industry to reformulate. Professor Jebb also said the Mexican tax had cut consumption, primarily among the poor, of sugary drinks, and there was an increase in sales of low-sugar drinks. Therefore the Sugar Tax law has worked quite well for the government and people of Mexico in the small time of two years!