Taxing unhealthy food and drinks to improve health
Abstract
An increasing number of countries are introducing taxes on unhealthy food and drinks, but will they improve health? Oliver Mytton , Dushy Clarke , and Mike Rayner examine the evidence
In the past year Denmark has introduced a “fat tax,” Hungary a “junk food tax,” and France a tax on sweetened drinks.1 2 Peru has announced plans to tax junk food, and other countries, notably Ireland, are also considering such taxes. Last year’s UN high level summit on non-communicable disease recognised a role for food taxes,3 and the UK prime minster, David Cameron has said the UK should consider them.4
Despite this recent interest among policy makers there has been relatively little critical analysis. Discussion of the evidence of health effects and the important question of what to tax has often been lacking. Government intervention in the food market, in the form of agricultural subsidies and taxation that is unrelated to health, is often overlooked.
The terms used in the debate can be unclear and misleading. A fat tax may refer to a tax on fat, saturated fat, or the dietary causes of obesity. We prefer the broader term: health related food taxes, which includes any tax levied at a higher rate on food items that are considered unhealthy. This suggests a focus on overall health, rather than just obesity, and opens up the possibility of targeting different nutrients or parts of the diet to maximise overall health gains. As the burden of diet related disease (cancer, cardiovascular disease, type 2 diabetes, and dental caries) is large and greater than that attributed solely to obesity,5 this seems a more pragmatic approach.
The Hungarian and Danish health related food taxes are often held up as the first of a kind. While they are unusual in being explicit …
... Mindezekkel ellentétben a népegészségügyi adó (fat tax, chips/csipsz adó) bevezetése gyorsabb változásokat ígérő megoldásnak tűnt, legalábbis egyes közgazdászok és a politikai döntéshozók szemszögéből. (Kutasi and Perger, 2014) Kutatások szerint (Mytton, 2012) a kockázatok ilyetén módon történő beépítése az érintett élelmiszerek árába egyfelől alkalmas az egészségtelen ételek fogyasztásának visszaszorítására, feltételezhetően nemcsak az árak emelésén és a kínálat mérséklésén keresztül, hanem közvetve az egészségtudatos táplálkozás kultúrájának fejlesztése által is. A népegészségügyi adó ugyanis egyfajta határozott állásfoglalásként is értelmezhető az állam részéről, miszerint az "egészség = érték". ...
... A 2010-es évek legelején több ország döntéshozói is élénk érdeklődést mutattak az egészségtelen ételeket és italokat sújtó adók iránt, tény ugyanakkor: azzal kapcsolatosan, hogy az ilyen típusú adók milyen hatással vannak az adott termék fogyasztására, csak kevés felmérés készült, nyilvánvalóan nem függetlenül attól a körülménytől, hogy az e célra rendelkezésre álló mérési módszerek messze nem tökéletesek. (Mytton et al., 2012) Oliver Mytton és munkatársai tanulmányukban három formáját különböztették meg a népegészségügyi adók hatékonyságát mérő vizsgálatoknak: ezek az úgynevezett természetes kísérletek (natural experiments), az ellenőrzött (kvázi laboratóriumi) körülmények között folytatott vizsgálatok (controlled trials), valamint a modellező tanulmányok (modelling studies). (Mytton et al., 2012) ...
... (Mytton et al., 2012) Oliver Mytton és munkatársai tanulmányukban három formáját különböztették meg a népegészségügyi adók hatékonyságát mérő vizsgálatoknak: ezek az úgynevezett természetes kísérletek (natural experiments), az ellenőrzött (kvázi laboratóriumi) körülmények között folytatott vizsgálatok (controlled trials), valamint a modellező tanulmányok (modelling studies). (Mytton et al., 2012) ...
A népegészségügy olyan társadalmi tevékenység, amelynek célja a lakosság egészségi állapotának javítása, mely az egészség megőrzésére és a betegségek megelőzésére irányuló tevékenységeket takar. Ezen belül fontos területet jelentenek az élelmiszerekre, mint elismerten az egészséget befolyásoló tényezőre vonatkozó szabályok. A népegészségügy területén belül leginkább preventív, a lakosság attitűdjét befolyásoló szabályozórendszer jellemző, míg az élelmiszerek összetételére vonatkozó előírások az élelmiszerbiztonság területére tartoznak, bár utóbbinak is végső soron az egészség megőrzése és a betegségek megelőzése a célja. A magyar jogalkotó 2011-ben, a népegészségügyi termékadóról szóló 2011. évi CIII. törvénnyel (a továbbiakban: Neta törvény, Neta tv.) vezette be – nemzetközi szinten is úttörő módon – a népegészségügyi termékadót (a továbbiakban: neta), „a népegészségügyileg nem hasznos élelmiszerek fogyasztásának visszaszorítása és az egészséges táplálkozás előmozdítása, valamint az egészségügyi szolgáltatások, különösen a népegészségügyi célú programok finanszírozásának javítása érdekében”. (Neta tv. 2011) Célkitűzésem kettős, egyrészt azt vizsgálom, hogy a Neta tv. 2011. szeptemberi hatályba lépése óta milyen módosításokon esett át, másrészt arra a kérdésre keresem a választ, hogy alkalmazása során milyen kihívásokkal szembesültek/szembesülnek a hazai élelmiszeripar, azon belül is a sütőipari ágazat szereplői. Cikkemmel a rendelkezésemre álló hazai és nemzetközi szakirodalom másodelemzésére is vállalkozom, a Neta törvény teleologikus értelmezésével együtt; bemutatva egyúttal, hogy a magyar sütőipari gyártók számára a Neta törvény alkalmazása miért is problémás, annak többféle vonatkozásában is.
... Even though the literature already presents some empirical studies measuring how carbon taxes on food may contribute to the achievement of the EU GHGE reduction target (Wirsenius et al. 2011;Caillavet et al., 2016;Edjabou and Smed, 2013;Mytton, Clarke and Rayner, 2012;Jansson and Säll, 2018;Bonnet et al., 2018;Tiboldo et al., 2022), the introduction of a "sin tax" on food, as it was introduced in the past for other goods (e.g., tobacco, alcohol, and sugar-sweetened beverages), may lead to many controversies and oppositions. In detail, some of the controversies are related to the distributional effects of the tax, since this measure might disproportionally affect the most vulnerable groups of the population, such as low income households (Klenert, Funke, and Cai 2023). ...
... CO2) would result in minimal adjustments in GHGE of at most 1.4%, and less than 1% in most cases The result is explained by the relative inelasticity of demand for broad food categories, as documented in online Appendix, and the substitutions among foods that tend to limit the direct effect of a tax. It is also consistent with much of the literature on "sin taxes" in public health, which considers that non-trivial adjustments in diets require a relatively high tax rate on some food category, usually in excess of 20% (Mytton et al., 2012). ...
Since agriculture is responsible for a considerable share of anthropogenic greenhouse gas emissions (GHGE), this paper examines the impact of various carbon taxes designed to incentivize environmentally friendly food consumption patterns in four European countries: Finland, Italy, Sweden, and the United Kingdom. As the proposed fiscal policies are likely to affect food consumption patterns, the study also assesses the consequent changes in diet quality and welfare. The results from this analysis reveal considerable variations in the reduction of GHGE across countries and tax schemes. While most taxation schemes have only a modest impact on dietary quality, these effects differ among nations. Additionally, the welfare cost of the compensated scheme is relatively small but not insignificant. These findings raise questions about the efficacy of a common European fiscal policy for climate mitigation compared to a more flexible approach where each member state calibrates the tax according to its unique circumstances.
... This includes information on the specific types of foods and food groups that are subject to taxes, as well as the jurisdictions in which these taxes are implemented. Furthermore, the study sheds light on important aspects of the excise taxes and tariffs, such as their rates and design [19][20][21][22][23][24][25][26][27][28][29][30][31][32][33][34][35] . ...
... It is worth mentioning that the study was unable to explicitly examine the rationale behind tax changes, as this information was not consistently available from legislation and other collected data. However, in certain cases, this information may be accessible through alternative sources [31][32][33][34] . ...
Noncommunicable diseases (NCDs) are the primary cause of premature mortality in Pacific Island Countries and Territories (PICTs), as well as in numerous other jurisdictions worldwide. The Pacific region has declared an NCD crisis and has recommended the implementation of food taxation policies to address the dietary risk factors associated with these diseases. However, the progress in this regard remains uncertain.The review focused on food taxation policies, including excise taxes and tariffs, that were implemented between 2000 and 2020 in 22 PICTs. The key characteristics of these policies were examined. The search for relevant information was conducted using databases, government legal repositories, and broad-based search engines. The identified documents for screening included legislation, reports, academic literature, news articles, and grey literature. Additionally, key informants from each PICT were contacted to gather further data and validate the findings. The results were analyzed through narrative synthesis. Out of the 22 PICTs included in the study, 14 had implemented food taxation policies, and 5 had introduced excise taxes. Processed foods, sugar, and salt were the primary targets of these excise taxes. A total of 84 changes in food taxation policies were identified across all food groups. Among these changes, a total of 279 taxes were identified based on food groups, with 85% being tariffs and 15% being excise taxes. The individual tax rates varied significantly. The most common tax design was ad valorem, followed by volumetric.
... In their response to the initial consultation process on the SSBT in Ireland, the Royal College of Physicians of Ireland [64] specifically noted that only taxes achieving a 10-20% price increase would reduce consumption of sugar-sweetened drinks [65,66]. The WHO have recently stated that 'While no empirical best practice for effective SSB tax levels have been set, excise taxes need to be sufficiently high to impact affordability' [18]. ...
Background
The World Health Organization (WHO) supports the use of Sugar-Sweetened Beverage Taxes (SSBTs) as a fiscal lever to help reduce sugar consumption and tackle obesity. Obesity is associated with a range of adverse health outcomes. In response to increasing levels of obesity in Ireland, an SSBT was introduced in 2018. Previous research in Ireland has noted that the pass-through rate of the SSBT in retail (off-site consumption) settings was poor. However, to date, no research has examined the SSBT pass-through rate in hospitality (on-site consumption) venues in Ireland.
Methods
This research examines the SSBT pass-through rate on Coca-Cola versus diet versions of Coca-Cola in a convenience sample of 100 hospitality venues in two provincial Irish cities.
Results
Wilcoxon signed rank test analysis revealed that regular Coca-Cola was significantly more expensive compared to the price charged for diet versions of Coca-Cola. However, in 85.6% of cases the same price was charged for both full-sugar and sugar-free drinks. The mean pass-through rate of the SSBT was 33.8%.
Conclusion
The effective functioning of the SSBT is premised on persistent price differences between soft drink prices based on sugar content. However, this is barely evident in the hospitality sector in Ireland. A number of recommendations are suggested, including both increasing the SSBT, and increasing it annually in line with inflation.
... This situation suggests that educational programmes on healthy eating developed in Spain such as the NAOS Strategy [36] have not had sufficient social impact to reduce the consumption of ultra-processed products. According to Mytton et al. [37], a 20% tax on ultra-processed products could be an effective social measure to dissuade people from consuming them. In Spain, only the Catalonia region has established a tax on the consumption of sugary drinks [38], but not on other ultra-processed products, and at the moment there are no conclusive results about the effectiveness of said tax. ...
(1) Background: University students, often constrained by time and influenced by socio-economic factors such as culture and religion, frequently adopt diets centred on ultra-processed foods (UPFs), increasing the risk of long-term non-communicable diseases. This study aimed to assess UPF consumption among Spanish university students and explore the potential impact of religion and the academic year on their eating habits. (2) Methods: In a cross-sectional study of 257 university students aged 18–31, UPF consumption was assessed using NOVA food classification at the academic year’s start and end. Chi-square and Wilcoxon tests analysed UPF consumption changes, while binary logistic regression identified associations between religion and weekly UPF consumption. (3) Results: Muslim students had a consumption of industrial bakery products almost five times [95% CI: 2.694–9.259] higher than that observed among Christians. Similar data were observed for artificial juice consumption (OR = 3.897, 95% CI = 2.291–6.627) and candy consumption (OR = 3.724, 95% CI = 2.051–6.762). Moreover, a greater percentage of calories and grams of saturated fats from UPFs was observed for Muslims at the end of the study. (4) Conclusions: Highlighting the impact of religion on UPF consumption among students underscores the necessity of monitoring and intervening in dietary habits to prevent undesirable long-term complications such as cardiovascular diseases.
Context
Taxing unhealthy foods and drinks is an essential measure against the double burden of malnutrition that affects every nation worldwide. In turn, subsidizing the consumption of healthy foods can also be a critical measure for changing the population's behavior and improving health indicators.
Objective
A systematic review was conducted of food subsidies and their potential impact on food purchases, consumption, overweight/obesity, and changes in body mass index (BMI).
Data Sources
The PubMed, Embase, LILAC, Scientific Electronic Library Online, and Google Scholar databases were searched to identify studies investigating the effects of subsidies on the amount of food purchased, food consumption, caloric intake, nutrient intake, and their impact on overweight, obesity, and BMI changes. The review followed the Preferred Reporting Items for Systematic Reviews and Meta-Analyses checklist.
Data Extraction
Two investigators independently performed data screening, extraction, and quality assessment.
Results
Of the 6135 studies screened, 149 were read in full and 18 were included in this systematic review. Most studies investigated the effects of subsidy scenarios on food purchases and observed increases in fruit and vegetable (F&V) purchases when these were subsidized. In randomized controlled studies, subsidized healthy foods were purchased more often. However, when the subsidy was suspended, F&V consumption decreased. Although quasi-experimental studies have demonstrated increased F&V consumption due to subsidies, some studies showed increased saturated fat and sodium intake. Only 2 studies evaluated the relationship between subsidies and obesity, yielding conflicting results.
Conclusion
Although the subsidies appear to encourage purchase and consumption of healthier foods, enhancing the quality and diversity of dietary choices, the removal of subsidies can lead to a decline in the consumption of healthier foods. Additionally, their impact on obesity and BMI remains uncertain and requires further research.
Systematic Review Registration
PROSPERO registration by the number CRD42023442122.
Özet
Günümüzün salgın hastalığı olarak nitelendirilen obezite, başta Amerika olmak üzere diğer gelişmiş ve gelişmekte olan ülkelerde hızla yayılmaktadır. Obezite hastalığı, sonuçları itibariyle sadece bireyin kendisini etkileyen bir sağlık problemi olarak kalmamakta aynı zamanda topluma ekonomik ve sosyal maliyetler yüklemektedir. Obezitenin ortaya çıkmasında biyolojik ve sosyoekonomik birçok faktörün etkili olduğu ifade edilmektedir. Hükümetler hem maliyetlerinin en aza indirilmesi hem de paternalist devlet anlayışı gereği özellikle 2000'li yıllardan sonra obezite ile mücadelede vergi ve sübvansiyonlar başta olmak üzere çeşitli araçlarla aktif rol oynamaya başlamıştır. Bu doğrultuda yüksek şeker ve yağ içeren sağlıksız gıdalar üzerine obezite vergileri konularak bu ürünlerin tüketiminin azaltılması hedeflenmiştir. Çalışmada obezite ve gelir arasındaki ilişki baz alınmış, obezitenin farklı gelir grupları içindeki dağılımı tespit edilmeye çalışılmıştır. Bu bağlamda obezite vergileri üzerine bir değerlendirme yapılmıştır. Sonuç olarak, Eurostat verileri ve yapılan çalışmalar incelendiğinde yüksek gelirli ülkelerde obezitenin daha çok düşük gelirli gruplarda yoğunlaştığı; düşük gelirli ülkelerde ise obezitenin daha çok zengin kesimlerde yoğunlaştığı; orta gelirli ülkelerde ise obezitenin hangi gelir gruplarında yoğunlaştığına dair genel bir sonucun çıkarılamayacağı görülmüştür. Ayrıca çalışmada, obezite vergilerinin regresif özellikte olmaları sebebiyle gelir dağılımını bozacağı ve bu vergilerin yerine sağlıklı gıdaların sübvanse edilmesi ile halkın obezite hakkında bilinçlendirilmesi gibi alternatif/tamamlayıcı politikalara başvurulması gerektiğine dikkat çekilmiştir.
Abstract
Obesity, which is described as today's epidemic disease, is spreading rapidly in developed, especially in America, anddeveloping countries. Obesity is not only a health problem that affects the individual, but also imposes economic and socialcosts on society. It is stated that many biological and socioeconomic factors are effective in the emergence of obesity.Governments have started to play an active role in the fight against obesity with various tools, especially taxes andsubsidies, especially after the 2000s, due to both minimizing their costs and the paternalist state understanding. In thisdirection, it is aimed to reduce the consumption of these products by placing obesity taxes on unhealthy foods containinghigh sugar and fat. In the study, the relationship between obesity and income was taken as a basis, and the distribution ofobesity among different income groups was tried to be determined. In this context, an evaluation was made on obesitytaxes. As a result, when Eurostat data and studies are examined, it is seen that obesity is mostly concentrated in low-income groups in high-income countries; in low-income countries, obesity is more concentrated in the wealthy; In middle-income countries, it has been observed that a general conclusion cannot be drawn about which income groups obesity isconcentrated in. In addition, it was pointed out in the study that due to the regressive nature of obesity taxes, incomedistribution would be distorted and alternative/complementary policies such as subsidizing healthy foods and raisingawareness of the public about obesity should be applied instead of these taxes.
The rising rates of obesity have prompted a reevaluation of society's habits and this study examines the intersection of two key areas: current trends in obesity and advancements in food. Through a review of existing research, regulatory frameworks, and outcomes, this study aims to elucidate these areas and assess opportunities for collaboration. This analysis highlights how these foods not only offer direct health benefits but also how they align with public health policies to foster societal well-being. This study discusses the role of regulatory measures in shaping the market for healthy food options and examines the impact of these interventions on consumer behavior and industry practices. By investigating the dual scientific research and policy development, this study provides insights into the collaborative efforts required to tackle obesity effectively.
Background
The WHO supports the use of Sugar-Sweetened Drinks Taxes (SSDTs) as a fiscal lever to help reduce sugar consumption and tackle obesity. Obesity is associated with a range of adverse health outcomes. In response to increasing levels of obesity in Ireland a SSDT was introduced in 2018. Previous research in Ireland has noted that the pass-through rate of the SSDT in retail (off-site consumption) settings was poor. However, to date no research has examined the SSDT pass-through rate in hospitality (on-site consumption) venues in Ireland.
Methods
This research examines the SSDT pass through rate on full-sugar versus diet versions of Coca-Cola in a convenience sample of 100 hospitality venues in two provincial Irish cities.
Results
In 88% of cases the same price was charged for both full-sugar and sugar free drinks.
Conclusion
It is generally assumed that the SSDT would result in persistent price differences between soft drink prices based on sugar content. However, this is barely evident in the hospitality sector in Ireland. A number of recommendations are suggested, including both increasing the SSDT, and increasing it annually in line with inflation.
This study uses an empirical case study to investigate the revenue implications of reducing a discriminatory excise tax. The case study is Ireland, which provides a natural experiment because it has both imposed and removed such a discriminatory tax (on soft drinks) in the past two decades. The authors find that soft drink consumption is price elastic, income elastic, and sensitive to weather. They estimate that 30% of the amount of surrendered excise tax revenue is recaptured by the value-added tax and income tax. The remaining 70% loss is further reduced by a small reduction in welfare costs, elimination of administration costs, and reduced compliance costs. The rate-revenue curve has a negative slope, even though demand is price elastic, presumably because marginal costs are rising and the tax reduction is not fully captured in the price reduction. In effect, the authors find undershifting and no evidence of a Laffer effect.
A Bayesian method of estimating multivariate sample selection models is introduced and applied to the estimation of a demand
system for food in the UK to account for censoring arising from infrequency of purchase. We show how it is possible to impose
identifying restrictions on the sample selection equations and that, unlike a maximum likelihood framework, the imposition
of adding up at both latent and observed levels is straightforward. Our results emphasise the role played by low incomes and
socio-economic circumstances in leading to poor diets and also indicate that the presence of children in a household has a
negative impact on dietary quality.
Introduction It is unclear how much of the geographical variation in coronary heart disease (CHD), stroke and cancer mortality rates within the UK is associated with diet. The aim of this study is to estimate how many deaths from CHD, stroke and cancer would be delayed or averted if Wales, Scotland and Northern Ireland adopted a diet equivalent in nutritional quality to the English diet.
Methods Mortality data for CHD, stroke and 10 diet-related cancers for 2007–2009 were used to calculate the mortality gap (the difference between actual mortality and English mortality rates) for Wales, Scotland and Northern Ireland. Estimates of mean national consumption of 10 dietary factors were used as baseline and counterfactual inputs in a macrosimulation model (DIETRON). An uncertainty analysis was conducted using a Monte Carlo simulation with 5000 iterations.
Results The mortality gap in the modelled scenario (achieving the English diet) was reduced by 81% (95% credible intervals: 62% to 108%) for Wales, 40% (33% to 51%) for Scotland and 81% (67% to 99%) for Northern Ireland, equating to approximately 3700 deaths delayed or averted annually. For CHD only, the mortality gap was reduced by 88% (69% to 118%) for Wales, 58% (47% to 72%) for Scotland, and 88% (70% to 111%) for Northern Ireland.
Conclusion Improving the average diet in Wales, Scotland and Northern Ireland to a level already achieved in England could have a substantial impact on reducing geographical variations in chronic disease mortality rates in the UK. Much of the mortality gap between Scotland and England is explained by non-dietary risk factors.
Obesity interventions can result in weight loss, but accurate prediction of the bodyweight time course requires properly accounting for dynamic energy imbalances. In this report, we describe a mathematical modelling approach to adult human metabolism that simulates energy expenditure adaptations during weight loss. We also present a web-based simulator for prediction of weight change dynamics. We show that the bodyweight response to a change of energy intake is slow, with half times of about 1 year. Furthermore, adults with greater adiposity have a larger expected weight loss for the same change of energy intake, and to reach their steady-state weight will take longer than it would for those with less initial body fat. Using a population-averaged model, we calculated the energy-balance dynamics corresponding to the development of the US adult obesity epidemic. A small persistent average daily energy imbalance gap between intake and expenditure of about 30 kJ per day underlies the observed average weight gain. However, energy intake must have risen to keep pace with increased expenditure associated with increased weight. The average increase of energy intake needed to sustain the increased weight (the maintenance energy gap) has amounted to about 0·9 MJ per day and quantifies the public health challenge to reverse the obesity epidemic.
Diet determines cholesterol concentrations, and cholesterol concentrations determine the prevalence of ischaemic heart disease. This paper explores the potential effects of fiscal measures on diet and ischaemic heart disease. There is a clear economic rationale for this approach: the correction of market failure caused by externalities. Externalities are said to occur when some of the costs of consumption are not borne by the consumer. When ischaemic heart disease strikes, there are costs to the community (productivity losses or indirect costs) and to the health service (direct costs). A case can therefore be made for using taxation to compensate for the external costs of an atherogenic diet.Summary pointsCurrent dietary patterns are partly responsible for the high risk of ischaemic heart disease in Britain, in particular among low income groups; these dietary patterns are reinforced by the material constraints of povertyPricing of foodstuffs encourages the purchase and consumption of a cholesterol raising diet, particularly among people with tight food budgetsBy extending value added tax to the main sources of dietary saturated fat, between 900 and 1000 premature deaths a year might be avoidedThe additional tax revenue could finance compensatory measures to raise income for low income groupsEconometric and health policy research should investigate the effects of price changes on diet and healthDiet, cholesterol concentrations, and ischaemic heart diseaseThe relation between diet, serum cholesterol concentrations, and ischaemic heart disease is relatively well understood. In individuals, serum cholesterol concentrations—or more specifically, the ratio of low density lipoprotein to high density lipoprotein—are a major determinant of the risk of ischaemic heart disease. Serum cholesterol concentrations are largely determined by the proportion of dietary energy derived from saturated or polyunsaturated fats and by dietary intake of cholesterol. The Keys equation (box), which has recently been corroborated, describes this in a simple mathematical relationship.1 3The Keys equationChange in serum cholesterol concentration(mmol/l)=0.031×(2Dsf-Dpuf)+1.5 √ DchDsf=change in percentage of dietary energy from saturated fatsDpuf=change in percentage of dietary energy from polyunsaturated fatsDch=change in dietary cholesterol intakeIn populations, average cholesterol concentration predicts the incidence of ischaemic heart disease. A rise of 0.6 mmol/l is associated with 38% increase in ischaemic heart disease mortality; an equivalent fall results in a 25-30% fall in the incidence of ischaemic heart disease within five years. 4 5 In a meta—analysis, 80% of international variation in ischaemic heart disease was attributed to variation in serum cholesterol concentrations.4 Where average cholesterol concentrations have changed, the incidence of ischaemic heart disease has fallen by the predicted amount.6 The fall in relative risk of ischaemic heart disease is greater in younger age groups (an estimated 54% at age 40, 39% at age 50, 27% at age 60, 20% at age 70, and 19% at age 80 for an 0.6mmol/l fall in cholesterol concentration), and the effects in women seem to be broadly similar to those in men.4 Because lowering cholesterol from any initial value has benefits, all income groups would experience some benefits.7Sources of saturated fat in the British dietThe main sources of saturated fat in the diet in the United Kingdom are whole milk, butter, and cheese (table 1). 8 Isocaloric substitution of these foodstuffs—substitution with alternatives providing the same dietary energy in the form of carbohydrate, monounsaturated fats, or polyunsaturated fats—would lower cholesterol concentrations. Table2 illustrates the effects of replacing half of the intake of these foodstuffs with alternatives containing monounsaturated fats or carbohydrates. The effect would be to lower cholesterol concentrations by 0.2 mmol/l and the incidence of ischaemic heart disease by between 7.6% and 10.9%.View this table:View PopupView InlineTable 1 Main sources of saturated fat in the British dietView this table:View PopupView InlineTable 2 Effect of a 50% isocaloric substitution of key foodstuffs with alternatives containing no saturated fat8The limits of informed consumer choiceIn recent years the dietary gap between the rich and poor has widened.9 This is hardly surprising. Important financial, material, and cultural constraints prevent people on low incomes from acting on dietary information. There is also considerable disinformation concerning diet and ischaemic heart disease.10 Relying on informed consumer choice alone is therefore likely to widen differentials in nutrition between the rich (who have the means to act on information) and the poor (who do not). Is there another way?Economic models of demand for foodstuffsAs dietary foodstuffs are purchased, it follows that the total contribution of a foodstuff to diet is likely to be proportional to consumer demand. In economic models, demand for a good is a function of its own price, the price of other goods, overall purchasing power (income), and “consumer taste.” One model of demand (which is supported by empirical data) says that the demand for certain broad categories of consumption goods is “separable.”11 This means that a change in the price of goods unrelated to foodstuffs (such as housing or clothes) will affect demand for foodstuffs in much the same way as a change in overall income. For example, if housing became cheaper, it would affect demand for foodstuffs in the same way as an increase in income. This means that demand for different kinds of foodstuffs is affected mainly by their relative prices and by the “food budget,” the amount of household income available to be spent on food.Two strategies for improving nutrition emerge from this discussion. Firstly, increasing the food budget will improve nutrition, as higher income groups in Britain typically have more nutritious food consumption patterns.9 Secondly, systematically altering the relative prices of different foodstuffs will affect food consumption.Estimating the effects of price changesConsumer goods that have near substitutes have a high price elasticity of demand—that is, a small proportionate increase in the price leads to a large proportionate change in demand. Small changes in the relative prices of near substitutes can lead to large changes in consumption patterns. For example, a small price difference (about 10%) between leaded and unleaded petrol was sufficient to cause a considerable shift to unleaded petrol and to encourage manufacturers to produce cars that could use the cheaper fuel. Using price changes to alter food consumption is therefore most likely to be effective where foodstuffs have a high price elasticity of demand. It may even stimulate manufacturers to produce cholesterol lowering or cholesterol neutral foodstuffs.There is little information in the public domain on the specific price elasticities of whole milk, butter, cheese, biscuits, buns, cakes and pastries, puddings, and ice cream. In the absence of empirical data we have to make some judicious estimates. In general, foodstuffs tend to have price elasticities of a magnitude of less than one.12 Price elasticities are likely to be larger where there are near substitutes. Given that reduced fat milks are near substitutes for whole milk, let us assume that the price elasticity of demand for whole milk is near to1.0. This means that a 1% increase in price would lead to a 1% fall in consumption. Margarine is an acceptable substitute for butter: we can assume a smaller price elasticity for butter, perhap 0.7. Reasonable substitutes—with more polyunsaturated fat and less saturated fat—for biscuits, buns, cakes and pastries, puddings, and ice cream can be manufactured. We can assume a high price elasticity of demand, perhaps 1.0. There is, however, no cholesterol neutral substitute for cheese, and it is likely that the price elasticity is low, perhaps0.5.At present most foodstuffs are exempt from value added tax. The simplest way of changing prices within the existing taxation framework would be to extend value added tax (currently 17.5%) to the principal sources of dietary saturated fat while exempting cholesterol neutral foods that are currently taxed (such as orange juice and low fat frozen yoghurt). Whole milk is likely to be substituted with semiskimmed milk, so that saturated fat intake will fall by half the overall reduction in consumption. Margarines rich in polyunsaturates have a neutral effect on cholesterol, so substitution reduces cholesterol concentrations proportionately. Biscuits, buns, cakes and pastries, puddings, and ice cream could be taxed if they raised cholesterol concentrations but exempt if the ratio of polyunsaturates to saturates (and trans fatty acids) were more favourable. Realistically, substitutes would also be likely to be cholesterol raising, so intake of saturated fat would fall by half the overall reduction in consumption. As table 3 shows, with these substitutions the incidence of ischaemic heart disease falls by between 1.8% and 2.6%. Given a proportionate fall in ischaemic heart disease mortality, this would prevent between 1800 and 2500 deaths a year, between 900 and 1300 of these in people aged under 75.13 Using the age specific reductions in ischaemic heart disease given above (a proxy for age specific mortality reductions) gives a similar estimate: about 900 to 1000 deaths are avoided in people under 75 (table 4) 4.View this table:View PopupView InlineTable 3 Effect of extending value added tax at 17.5% to the main sources of dietary saturated fat on the incidence of ischaemic heart diseaseView this table:View PopupView InlineTable 4 Estimated numbers of deaths due to ischaemic heart disease avoided by extending value added tax to sources of dietary saturated fatEquityTaxation is a blunt instrument. Because poor people spend a greater proportion of their income on food than rich people, they are likely to be more sensitive to price changes. They are also at higher risk of ischaemic heart disease. The health benefits of such a policy are therefore likely to be progressive. Paradoxically, this also means that the effects on material wellbeing are likely to be regressive. Most consumers will end up by spending more on food and this will disproportionately affect the poor. An important part of such a strategy should therefore be to compensate low income groups by raising their incomes. The most directly targeted approach would be to simultaneously raise the value of welfare benefits, particularly those intended for children in low income groups, who are in any case not the target of this policy. Since food taxation would raise revenue, the overall effect on government finances would be neutral.Conclusions
The assumptions in this paper are somewhat conservative. No account is taken of the effect of raising low incomes or the likelihood that people at highest risk would benefit most. Price changes might increase the consumption of fruit and vegetables or reduce levels of obesity, but these considerations are beyond the scope of this paper. Given that there are potential benefits to a fiscal food policy, how politically feasible would such a policy be? In the short term the answer is probably “not at all,” as the present government has pledged not to extend value added tax to foodstuffs. But in the longer term? The notion that taxation might be used to adjust for externalities is gaining currency among policymakers—for example, the “polluter pays” principle and road pricing to reduce congestion. Nor is the use of taxation to influence health new: since 1993 it has been policy to increase the real level of tobacco duties by 3% every year.14 Cigarette taxation raises the same dilemma regarding equity. Low income groups tend to smoke more and are more price sensitive than high income groups. They therefore benefit the most from taxation, but disproportionately bear the tax burden.15The nutritional and physiological parts of this model are relatively robust. The assumed relation between purchase of foodstuffs and food consumption is probably reasonable. The weak link is undoubtedly the assumed effects of price changes on purchase of foodstuffs. How reasonable are these assumptions? Could the impact of price changes be even greater? Neither searching economic research databases (EconLit, BIDS IBSS) nor writing to major supermarkets produced estimates of price elasticities of demand for these foodstuffs. One supermarket hinted that the data existed but were commercially sensitive. Yet this information is essential. If we are serious about improving nutrition a fiscal food policy is worth exploring. Interdisciplinary collaboration is needed between econometricians and nutritionists to investigate empirically the effects of price changes on the purchase of foodstuffs.References1.↵Keys A, Anderson J, Grande R. Serum cholesterol response to changes in the diet. IV. Particular saturated fats in the diet. Metabolism 1965; 14: 776–786.OpenUrlCrossRefWeb of Science2.Tang JL, Armitage JM, Lancaster T, Silagy CA, Fowler GH, Neil HAW. Systematic review of dietary intervention trials to lower blood total cholesterol in free-living subjects. BMJ 1998; 316: 1213–1220.OpenUrlFREE Full Text3.↵Clarke R, Frost C, Collins R, Appleby P, Peto R. Dietary lipids and blood cholesterol: quantitative meta-analysis of metabolic ward studies. BMJ 1997; 314: 112–117.OpenUrlFREE Full Text4.↵Law MR, Wald NJ, Thompson SG. By how much and how quickly does reduction in serum cholesterol concentration lower risk of ischaemic heart disease? BMJ 1994; 308: 367–373.OpenUrlFREE Full Text5.↵Holme I. An analysis of randomized trials evaluating the effect of cholesterol reduction on total mortality and coronary heart disease incidence. Circulation 1990; 82: 1916–1924.OpenUrlFREE Full Text6.↵Jousilahti P, Vartiainen E, Pekkanen J, Tuomilehto J, Sundvall J, Puska P. Serum cholesterol distribution and coronary heart disease risk: observations and predictions among middle-aged population in eastern Finland. Circulation 1998; 97: 1087–1094.OpenUrlFREE Full Text7.↵Law MR, Thompson SG, Wald NJ. Assessing possible hazards of reducing serum cholesterol. BMJ 1994; 308: 373–379.OpenUrlFREE Full Text8.↵Gregory J, Foster K, Tyler H, Wisemann M. The dietary and nutritional survey of British adults. London: HMSO, 1990. (Office of Population Censuses and Surveys, Social Survey Division.)9.↵James WPT, Ralph A, Leather S. Socioeconomic determinants of health: the contribution of nutrition to inequalities in health. BMJ 1997; 314: 1545–1548.OpenUrlFREE Full Text10.↵Tunstall-Pedoe H. Did MONICA really say that? BMJ 1998; 317: 102.OpenUrlFREE Full Text11.↵Moschini G, Moro D, Green RD. Maintaining and testing separability in demand systems. Am J Agric Econ 1994; 76: 61–73.OpenUrlCrossRef12.↵van Driel H, Nadall V, Zeelenberg K. The demand for food in the United States and the Netherlands: a systems approach with the CBS model. J App Econometrics 1997; 12: 509–523.OpenUrlCrossRef13.↵Office for National Statistics. Mortality statistics: cause. England and Wales, 1996. London: Stationery Office, 1998.14.↵Townsend J. Policies to halve smoking deaths. Addiction 1993; 88: 37–46.OpenUrlMedlineWeb of Science15.↵Townsend J, Roderick P, Cooper J. Cigarette smoking by socioeconomic group, sex, and age: effects of price, income, and health publicity. BMJ 1994; 309: 923–927.OpenUrlFREE Full TextCommentary: Alternative nutrition outcomes using a fiscal food policyEileen Kennedy (eileen.kennedy{at}usda.gov), deputy under secretarya, Susan Offutt, administratorbDepartment of Public Health and Epidemiology, University of Birmingham, Birmingham B15 2TTa Office of Research, Education, and Economics, US Department of Agriculture, 1400 Independence Ave NW, Whitten Building, Room 217W, Washington, DC 20250, USAb Economic Research Service, Office of Research, Education, and Economics, US Department of Agriculture, 1800 M Street NW, Room 4145, Washington, DC 20350, USACorrespondence to: E KennedyTom Marshall lays out an intriguing approach to a complicated public health problem. However, without further analyses and field testing, we believe the ultimate result will be disappointing.The relations of diet and disease—in particular, saturated fat and heart disease—have been well documented but are complex. The key determinant of how an individual responds to changes in fat and saturated fat is genetic. Thus there is a wide range of variation in response to lipid reduction strategies.1 Though diet and behavioural factors (physical activity, smoking) can be modified, the net response of serum and low density lipoprotein cholesterol to dietary changes is often limited. Well controlled studies show mixed reactions to modification of diet. The recently completed multi-year dietary intervention study in children trial in high risk children aged 8–10 years illustrates this result. Children were put on a diet containing 29% of total calories as fat and 10% of total calories as saturated fat. The total diet modification had only a modest effect on total serum and low density lipoprotein cholesterol in children who participated for up to three years.2 In light of this kind of evidence, one might question the levels of presumed impact contained in the Marshall article in which the dietary changes were in a small number of foods and on a more limited scale.Marshall discusses isocaloric substitution of foodstuffs to maintain the energy density of the diet. This type of substitution often results in a more costly diet. For example, substitution of skimmed milk for full fat milk would require about twice as much milk consumption to maintain the energy level in the diet. A recent paper indicates that individuals who reduce fat and saturated fat intake while maintaining the nutrient density of the diet do so by consuming a greater physical quantity of food.3We also question Marshall's statement that there is a sizeable difference overall in the diets of the rich and poor. Recent nationally representative data from the United States indicates only minor differences in overall diet quality between the low income and higher income groups.4 The reasons for this include the increasing tendency for eating away from home for both rich and poor and the related difficulty of controlling intake of fat and saturated fat from foods either eaten or prepared outside the home.5Marshall argues in favour of tax instruments for achieving public health impact. The effectiveness of the proposed extension of value added tax to the main sources of dietary fat depends on consumers' response to subsequent increases in prices of whole milk, butter, cheese, biscuits, buns, cakes and pastries, puddings, and ice cream. Price elasticities measure the response of quantities purchased to price changes. Marshall asserts there is little empirical evidence on the size of the relevant elasticities and assumes values reflecting relatively large responses to price changes. However, empirical evidence from the United States and Europe 6 7 shows that these elasticities are much smaller (in absolute value) than Marshall assumes, implying much smaller decreases in quantities consumed in response to an extension of value added tax. For example, Marshall's assumed elasticity of −1.0 for whole milk is eight times larger than that of Oskam.7 Oskam's estimated elasticity of −0.125 means that a 10% increase in the price of whole milk would decrease consumption by only 1.25%. If 17.5% value added tax were imposed on whole milk the reduction in dietary saturated fat would be 0.02% rather than the 0.15% estimated by Marshall (table 4). Further, estimates of cross-price elasticities (responses to changes in other food prices) suggest further dilution of the effect of value added tax on fat consumption as consumers adjust overall diets.There are more consumer friendly interventions for improving diet that Marshall does not consider, such as the introduction of functional or fabricated foods that do not require a change in consumer dietary behaviour. A modified food is simply substituted for the traditional food. One recent possibility is new margarine produced using plant sterols derived from naturally occurring plant extracts. Hendriks et al recently found that consumption based on one to two servings of spread per day in adults decreased serum cholesterol by 7-10%.8 At a similar cost, the functional foods provide an attractive means of reaching the consumer.FootnotesCompeting interests None declaredReferences1.↵Dreon DM, Fernstrom HA, Miller B, Krauss RM. Low-density lipoprotein subclass patterns and lipoprotein response to a reduced-fat diet in men. FASEB J 1994; 8: 121–126.OpenUrlFREE Full Text2.↵Writing Group for the DISC Collaborative Study. Efficacy and safety of lowering dietary intake of fat and cholesterol in children with elevated low-density lipoprotein cholesterol: the dietary intervention study in children (DISC). JAMA 1995; 273: 1429–1436.OpenUrlFREE Full Text3.↵Kennedy ET, Ohls J, Carlson S, Fleming K. The healthy eating index: design and application. J Am Diet Assoc 1995; 95: 1103–1108.OpenUrlCrossRefMedlineWeb of Science4.↵Kennedy ET, Bowman S, Powell R. Trends and patterns of fat consumption in the United States. J Am Coll Nutr 1999; 18: 207–212.OpenUrlFREE Full Text5.↵Lin B, Guthrie J, Frazao E. Nutrient contribution of food away from home in America's eating habits: changes and consequences. Washington, DC: US Department of Agriculture, 1999. (Economic Research Service Agricultural Information Bulletin No 750.)6.↵Huang KS. How economic factors influence the nutrient content of diets. An economic research service report. Washington, DC: US Department of Agriculture Economic Research Service, 1997. (Technical bulletin No 1864.)7.↵Oskam A. Principles of the EC dairy model. Eur Rev Agric Econ 1989; 16: 483–487.OpenUrl8.↵Hendriks HFJ, Weststrate JA, van Bliet T, Meijer GW. Spreads enriched with three different levels of vegetable oil sterols and the degree of cholesterol lowering in normocholesterolaemic and mildly hypercholesterolaemic subjects. Eur J Clin Nutr 1999; 53: 319–332.OpenUrlCrossRefMedlineWeb of Science
This paper analyses the quantitative effects of using economic instruments in health policy on the basis of price elasticities calculated from estimated demand systems. The nutritional effects of various taxation schemes are compared for households in different age groups and social classes. Focusing on the consumption of saturated fats, fibre and sugar; it is generally found that the impact of price instruments is stronger for lower social classes than in other groups of the population. With regard to age groups, it is mostly the youngest that decrease their demand for saturated fat in response to price changes, while it is mostly the middle-aged who exhibit price responsiveness in their demand for sugar. These groups are however not considered as key target groups for dietary regulation; thus tax instruments may be effective in improving diets on average, but the design of the instruments and the targeting of vulnerable groups with special needs should be done with care. It should be noted that a tax on a single nutrient or food may have undesired effects on the demand for other food components, though this may be avoided by introducing taxes/subsidies on several food products simultaneously.
One way in which to modify food purchases is to change prices through tax policy, subsidy policy, or both. We reviewed the growing body of experimental research conducted in the laboratory and in the field that investigates the following: the extent to which price changes influence purchases of targeted and nontargeted foods, total energy, or macronutrients purchased; the interaction of price changes with adjunctive interventions; and moderators of sensitivity to price changes. After a brief overview of economic principles and observational research that addresses these issues, we present a targeted review of experimental research. Experimental research suggests that price changes modify purchases of targeted foods, but research on the overall nutritional quality of purchases is mixed because of substitution effects. There is mixed support for combining price changes with adjunctive interventions, and there are no replicated findings on moderators to price sensitivity in experiments. Additional focused research is needed to better inform food policy development with the aim of improving eating behavior and preventing obesity.
Taxing unhealthy foods has been proposed as a means to improve diet and health by reducing calorie intake and raising funds to combat obesity, particularly sugar-sweetened beverages (SSBs). A growing number of studies have examined the effects of such food taxes, but few have estimated the weight-loss effects. Typically, a static model of 3500 calories for one pound of body weight is used, and the main objective of the study is to demonstrate its bias. To accomplish the objective, we estimate income-segmented beverage demand systems to examine the potential effects of a SSB tax. Elasticity estimates and a hypothetical 20 percent effective tax rate (or about 0.5 cent per ounce) are applied to beverage intake data from a nationally representative survey, and we find an average daily reduction of 34-47 calories among adults and 40-51 calories among children. The tax-induced energy reductions are translated into weight loss using both static and dynamic calorie-to-weight models. Results demonstrate that the static model significantly overestimates the weight loss from reduced energy intake by 63 percent in year one, 346 percent in year five, and 764 percent in year 10, which leads to unrealistic expectations for obesity intervention strategies. The tax is estimated to generate $5.8 billion a year in revenue and is found to be regressive, although it represents about 1 percent of household food and beverage spending.