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Taxing unhealthy food and drinks to improve health



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 …
       
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
Oliver T Mytton   , Dushy Clarke , Mike Rayner 
British Heart Foundation Health Promotion Research Group, Department of Public Health, University of Oxford, Oxford OX3 7LF, UK
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,3and 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,5this 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 about their health aims, similar taxes can be found in
other parts of the world (table 1). Most of these other taxes
are either goods and services taxes, levied principally on
unhealthy food items, or small excise taxes levied on sugar
sweetened beverages. Other countries have proposed introducing
health related food taxes.6 7
Price is an important determinant of food choices and diet.8
Economic theory predicts that as the price of an item rises the
consumption of that item will typically fall. Increasing the price
of unhealthy foods, by taxation, should reduce consumption of
the taxed foods. Observational data suggest that food
consumption is relatively insensitive to price changes, the
proportional change in consumption being less than the
proportional change in price.9-12 Moreover, when the price of
one good rises, consumption of some goods that are
co-consumed will fall and consumption of other goods
(substitutes) rise. How much consumption changes in response
to price is described by price elasticity values̶that is, the
percentage change in consumption for a one percentage change
in price. The balance of these overall effects, as well as the
health benefit of food items, will determine the overall health
effect of any health related food tax.
Economists generally agree that government intervention,
including taxation, is justified when the market fails to provide
the optimum amount of a good for societys wellbeing. The
argument has been applied for alcohol and tobacco. Suggested
market failures for food include a failure to appreciate the true
association between diet and disease, time inconsistency
(preference for short term gratification over long term
wellbeing), and not bearing the full health and social costs of
  
Evidence on the effectiveness of health related food taxes comes
from three sources: natural experiments, controlled trials of
price changes in closed environments, and modelling studies.
Correspondence to: O T Mytton
Extra material supplied by the author (see
Summary of controlled trials of price rises on food
Summary and comparison of modelling evidence of a saturated fat tax
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 2012;344:e2931 doi: 10.1136/bmj.e2931 (Published 15 May 2012) Page 1 of 7
 
Natural experiments may provide the most convincing evidence
of effect, but it can be difficult to tease apart the effects of other
factors on any observed changes.14 Only two studies have
explicitly examined the health effects of actual food taxes. Both
are from the US, where many states have introduced small taxes
on sweetened drinks.15 16 While neither study found asignificant
association between taxes and the prevalence of obesity at a
state level, the taxation level, at 1-8%, may have been too low
to observe an effect on population health.17 Astudy of soft drinks
taxation in Ireland, in place during the 1980s, found an 11%
decrease in consumption for each 10% increase in price but did
not examine health effects.18
A systematic review of the association between food price and
population weight found weak evidence of an inverse
association. It concluded that small price changes (from taxes
or subsidies) were not likely to produce significant changes in
obesity prevalence but that larger changes might.19 Effects were
greater for the young, poor, and those most at risk of being
 
Randomised controlled trials are the preferred research design
for studies of effectiveness, although they have limitations in
assessing some public health interventions.14 Several experiments
have manipulated price in closed or simulated environments.20
The results suggest that taxation of unhealthy food items is an
effective means of reducing consumption of these foods
(supplementary web table).20 For example a 35% tax on sugar
sweetened drinks ($0.45 (£0.28; 0.34) per drink) in a canteen
led to a 26% decline in sales.21 However, compensatory
behaviour might occur away from the study environment̶for
example, the consumption of more drinks away from the
canteen. It is also unclear how well simulated environments
where artificial constraints, fixed budgets, and restricted choices
are imposed on subjects predict actual life choices.20
 
Most published work on the dietary or health effects of health
related food taxes has used modelling.22 This reflects the limited
use of these taxes. The modelling studies use economic data
(price elasticity measures) to estimate how price changes will
affect consumption and diet. Some of these studies extend
changes in diet to estimate the effect on health, based on the
relationship between diet and health.
Particular interest has focused on sugar sweetened drinks
because of their strong association with obesity and diabetes.23
US studies predict a daily reduction in energy consumption of
29-209 kJ per person for a 20% tax (table 2), the lower values
coming from studies that considered only home consumption.24 25
Estimating the impact of these changes on weight and health
requires an understanding of how any reduction in total energy
consumed translates to weight loss. Newer techniques for
modelling the effect of energy intake on weight show good
agreement with empirical data. These techniques predict that a
20% tax on sugary drinks in the US would reduce the prevalence
of obesity by 3.5%.17 29 This rate is much higher than any of the
taxes currently imposed by individual states.
The effect of a similar tax in the UK would be less than in the
US, equivalent to around 12-29 kJ per person per day,27
reflecting the lower consumption of sugar sweetened drinks.
However, mean changes in the population will hide larger
reductions in regular consumers, who are at greater risk of
developing obesity and diabetes.
Studies that have examined taxes on other foods present a more
complicated picture (table 3). This reflects differences in
taxation scenarios, datasets used, and health outcomes assessed.
The studies suggest that the changes in food purchasing are
small relative to the taxes introduced, both because food
consumption is relatively inelastic and because of cross-price
elasticity effects, whereby untaxed or cheaper foods are
substituted for taxed foods, reducing the effect on nutrient
intake. However, small changes in diet can lead to meaningful
changes in important risk factors across the whole population,
resulting in substantial health benefits.30 The 1-3% reduction in
incidence of ischaemic heart disease predicted by several studies
modelling the effect of extending value added tax (at 17.5%)
to unhealthy foods in the UK,31-34 equates to 900-2700 fewer
deaths ayear. Some of these studies have also flagged important
considerations for policy makers̶taxing one nutrient (such as
saturated fat) may have negative effects on consumption of other
nutrients (such as salt or fibre).31 32 35 The overall impact on
health depends on the balance of these changes and could be
negative.31 32 Nutrient based taxes also seem to be more effective
than food based taxes.
Despite recent advances, modelling the effects of diet on health
is relatively new.36 Its accuracy is limited by the quality of
dietary, health, and economic data. There are concerns about
how well the economic data, based on small weekly fluctuations
in price, will predict the consumption changes that would result
from sustained price changes due to taxation.22 Other
compensatory behaviour that might increase energy intake or
reduce energy expenditure are not well captured in most models.
Assumptions have to be made about how food purchases map
to food consumption. Understanding the overall effect on health
is complicated and depends on mapping the effect of multiple
nutrient changes, including energy intake, to multiple health
outcomes. However, modelling does highlight some of the key
considerations surrounding these taxes.
   
Health related food taxes are regressive̶that is, poor people
pay agreater proportion of their income in tax than do the rich.40
However the health gains may be progressive,35 41 and, as is
found with many population-wide health interventions, health
inequalities may consequently narrow.42 Progressive health gains
are expected because poor people consume less healthy food
and have a higher incidence of most diet related diseases,
notably cardiovascular disease.43 Consequently the absolute
reduction in disease incidence would be greater among poorer
groups, assuming similar dietary changes. Moreover there is
some evidence that those who are poorer are more sensitive to
price changes and so would experience greater dietary
improvements. 19 35
  
Views on the acceptability of health related food taxes vary
widely.44 45 Opinion polls from the US put support for sugared
beverage taxes at 37% to 72%, support being greater when the
health benefits of the tax are emphasised.14 These polls pre-date
the era in which rising food prices and falling real incomes have
raised concerns about food poverty.46 None of this work has
addressed the question of an acceptable level of taxation.
Initially, cigarette taxes were low and gradually increased as
public opinion changed.19
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 2012;344:e2931 doi: 10.1136/bmj.e2931 (Published 15 May 2012) Page 2 of 7
The food industry argues that the taxes would be ineffective,
unfair, and would damage the industry leading to job losses.47 48
Similar arguments were used by the tobacco industry against
tobacco taxes.49
From a legislative point of view, it is still unclear how such
taxes are best introduced and enforced. Should the tax be levied
on the raw ingredients or on the final product? Should all
sweetened drinks be taxed, as in France, or just sugar sweetened?
How much sugar needs to be added before the drink is taxed?
 
While we have focused on the ability of taxes to change
individual behaviour to improve health, others have advocated
that the taxes be used to raise funds to treat diet related diseases,
subsidise healthy foods, or to stimulate industry reformulation
of food (such as removal of salt, sugar, or saturated fats from
foods). Subsidies on healthy foods may alleviate the regressive
nature of food taxes32 as well as maximise the health gains.22
Redesign of fishing and agricultural subsidies, to promote the
health of consumers and environmental sustainability, has also
been advocated. Such redesign will be challenging and could
happen in parallel with the introduction of health related food
Health related food taxes could improve health. Existing
evidence suggests that taxes are likely to shift consumption in
the desired direction, although policy makers need to be wary
of changes in other important nutrients. However, the tax would
need to be at least 20% to have asignificant effect on population
We thank Kelechi Nnoaham, Pete Scarborough and the  reviewers
for their critical review of the manuscript, and Roberta Friedman for
advice on compilation of table 1.
Contributors and sources: MR has advised on nutrition policy at national,
European, and international level, particularly around nutrient profiling,
marketing of unhealthy foods and health related food taxes. OTM is a
previous clinical adviser to the chief medical officer for England. He has
modelled the effects of different health-related food taxes in the UK.
This article arose from discussions between the three authors and from
work that DC undertook for the National Heart Forum. OTM researched
and wrote the article. DC undertook much of the preparatory work and
produced the first draft. MR oversaw the work and critiqued the
Competing interests: All authors have completed the ICJME unified
disclosure form at (available on
request from the corresponding author) and declare that DC was funded
by the National Heart Forum to undertake areview of literature on health
related food taxes. They have no financial relationships with any
organisations that might have had an interest in the submitted work in
the previous three years and no other relationships or activities that
could appear to have influenced the submitted work.
Provenance and peer review: Not commissioned; externally peer
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 2012;344:e2931 doi: 10.1136/bmj.e2931 (Published 15 May 2012) Page 3 of 7
       
Taxing a wide range of unhealthy foods or nutrients is likely to result in greater health benefits than would accrue from narrow taxes;
although the strongest evidence base is for a tax on sugar sweetened beverages
Taxation needs to be at least 20% to have a significant effect on obesity and cardiovascular disease
Taxes on unhealthy foods should ideally be combined with subsidies on healthy foods such as fruit and vegetables
49 Gilmore A, Savell E, Collin J. Public health, corporations and the new responsibility deal:
promoting partnerships with vectors of disease?    2011;33:2-4.
 2 April 2012
Cite this as:  2012;344:e2931
© BMJ Publishing Group Ltd 2012
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 2012;344:e2931 doi: 10.1136/bmj.e2931 (Published 15 May 2012) Page 4 of 7
       
   
1- 8%Sugar sweetened drinks (in 23 states)VariousUS
VariableSugar, chocolate, and sugary drinks1981Norway
0.40 tala/L (£0.11; 0.14 $0.18)Soft drinks1984Samoa
10%Soft drinks, confectionary, biscuits, and bakery products2000Australia
60 franc/L (£0.41; 0.55; $0.66) for imported drinksSweetened drinks, confectionary, and ice cream2002French Polynesia
5% on imported drinksSoft drinks2006Fiji
30% import levySugar, confectionary, carbonated drinks, cordial, and flavoured milks2007Nauru
Soft drinks 0.075/L (£0.06; $0.10); confectionary
Soft drinks and confectionary2011Finland
10 forint (£0.03; 0.04; $0.05) per itemFoods high in sugar, fat, or salt and sugary drinks2011Hungary
Kr16/kg (£1.76; 2.15; $2.84) of saturated fatProducts with more than 2.3% of saturated fat: meat, dairy products,
animal fats, and oils
072/LDrinks containing added sugar or sweetener2012France
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            
   
Found limited substitution with diet
or other drinks
Consumption reduced by 53 and 104
mL a week
Volume purchased10 or 20% taxUKNg27
Consumption both at and away from
home included
Reduction of 142-196 kJ among
adults and 167-213 kJ among
children per day
Energy intake20% sales taxUSLin17
Assumed no substitution with other
Reduction of 188-209 kJ per dayEnergy intake1 cent/ounce tax (~20%
Only considered consumption at homeReduction of 63 kJ per dayEnergy intake20% taxUSDharmasena25
Only considered consumption at
home; poorest and richest reduced
their consumption the least
Reductions of 29 and 52 kJ per dayEnergy intake20 or 40% taxUSFinkelstein24
Weight changes based on the 3500
kcal = 1 pound rule
Loss of 0.086 kg for an average man
and 0.091 kg for an average woman
Weight10% taxUSSchroeter28
Based on peer review articles from the Thow et al systematic review22 updated and combined with the Yale Rudd Centre study synopses
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 2012;344:e2931 doi: 10.1136/bmj.e2931 (Published 15 May 2012) Page 6 of 7
               
  
  
Economic data based on estimates
not empirical data
Reduction of 117-43 500 kJ per year
(predicted weight loss of 0.01-6.6 kg*)
Energy intakeTax on salty foods at 0.4-30%USKuchler37
Not adequately accounted for
substitution effects
Reduction of 176-3470 kJ per year
(predicted weight loss up to 0.5 kg*)
Energy intakeTax at 1%, 10%, and 20%; on
potato crisps, all crisps, or all
salty snacks
Absolute changes in saturated fat may
be poor indicator of health gains; a
better indicator is saturated fat as
proportion of total energy
Decreases in saturated fat 1% to 9%
and sugar 0-22%, but also up to 7%
decrease in fibre; lower socioeconomic
groups and younger people see greater
dietary change
Nutrient intakeTaxes on fatty meats, butter, and
cheese at 5%; saturated fat at
Kr7.9/kg; sugar at Kr10.3/kg
Absolute changes in saturated fat may
be poor indicator of health gains; a
better indicator is saturated fat as
proportion of total energy
The effect of the different taxes on
saturated fat was (i) −7.2%, (ii)−7.2%,
(iii) 1.4%; effect on sugar was (i) 6.4%,
(ii) 6.4%, and (iii)−15.8%
Nutrient intakeTax on (i) total fat at Kr8/kg; (ii)
saturated fat at Kr14/kg; or (iii)
sugar Kr5.6/kg
Not considered impact of changes in
other nutrients
Fat intake falls by 1% and 3%
Fat consumptionTax on fat at 10% or 50%USChouinard11
 
Only considered effects of dietary fat;
economic data based on estimates
not empirical data
1800-2500 deaths averted annuallyIschaemic heart
Extension of VAT at 17.5% to
foods high in saturated fat
Effect of reduced fruit and vegetable
consumption on other diseases, like
cancer, was not quantified
Annual change in deaths:
(i) 2500-3500 additional deaths
(ii) 2100-2500 deaths averted
VAT at 17.5% on: (i) foods high
in saturated fat; (ii) unhealthy
Not considered other effects of dietary
Increase in mean body weight*: 0.17 kg
male, and 0.15 kg female
WeightA 10% tax on food bought away
from home
Analysis based on old economic data;
not fully considered benefits from
reduced body mass index
Annual change in deaths:
(i) 1100-2300 additional deaths
(ii) 0-1300 additional deaths
(iii) 1600-6400 deaths averted
Cancer and
VAT at 17.5% on: (i) foods high
in saturated fat; (ii) unhealthy
foods; (iii) unhealthy foods with
Not considered effect of specific
nutrients (salt, saturated fat) and fruit
and vegetables
560 000 DALYS averted (because of
energy reduction of 121-176 kJ and fall
in mean body mass index of 0.6)
Cancer and
10% tax on unhealthy foodsAustraliaSacks39
Not considered the combined effect
of different dietary changes on health
2-3% reduction in coronary heart
disease; 2% for stroke; 3% lung cancer;
5% gastric cancer
Cancer and
1% for every 1% of saturated fat
in food with subsidy on fruit and
Kr1=£0.11; 0.13; $0.18. DALYS = disability adjusted life years.
*Weight loss estimates based on old rule of thumb that 3500 kcal reduction equates to one pound of weight lost.
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 2012;344:e2931 doi: 10.1136/bmj.e2931 (Published 15 May 2012) Page 7 of 7
... High-income countries rely significantly on personal income taxes and social security contributions, while these tax categories are utilised less in less developed countries. Health Taxes: Policy and Practice 28 In all income groups, on average, revenues from taxes on goods and services (i.e. consumption taxes) primarily come from the VAT. ...
... 12,27 Progressive health gains can be expected because smoking and consumption of SSBs cause diseases that disproportionately affect lowincome households. 21,28 Moreover, as mentioned previously, the progressivity of the tax and benefit system has to be analysed as a whole and the distributional consequences of tax mix shifts should be examined in concert with the public spending mix. Even a regressive health tax can still lead to an overall Health Taxes Downloaded from ...
... Unhealthy goods reduce the health level of individuals and impose the cost of being unhealthy and disease on individuals, families, and society (1). Harmful goods, such as solid and semi-solid oils, trans oils, sugar, salt, carbonated drinks, and cigarettes, play an important role in the spread of noncommunicable diseases and the increase in health costs (2). ...
Full-text available
Background: Taxes on unhealthy goods, in addition to reducing the consumption of these goods, preventing related diseases, and promoting public health, can provide significant financial resources for the health sector. Objectives: The purpose of this study was to investigate the problems and solutions of taxation to control the consumption of unhealthy goods to improve public health. Methods: This qualitative study was conducted in 2021. Semi-structured interviews with open-ended questions were held to collect information. Sampling was performed by purposive and snowball methods with 31 managers and key experts. The data were analyzed using the content analysis method. MAXQDA software (version 12) was used for classification and coding. Results: This study labeled 2 main themes and 10 subthemes. The main themes included problems of controlling unhealthy goods and solutions to controlling unhealthy goods. Poor decision-making, planning, and execution, production-related problems, smuggling and poor supervision, increased consumption of harmful goods, conflicts of interest, and advertisements of unhealthy goods are the most important of these problems. Imposing taxes, duties, and price hikes, providing alternatives, paying attention to all determinants of supply and demand, and taxation on advertising are also solutions to control unhealthy products. Conclusions: The health level of individuals should be improved by imposing taxes on unhealthy goods, determining accurate tax rates, and simultaneously using measures, such as providing alternatives to unhealthy goods and controlling advertisements. Paying serious attention to the list of harmful goods, coordination and cooperation of related organizations in formulating and implementing tax policies, and providing suitable alternatives to harmful products are the practical suggestions of this study.
... 88,[93][94][95][96][97] Where untaxed substitutes are also unhealthy, these should be taxed, but caution is warranted where such substitutes also provide micronutrients (eg, fruit juices contain sugar but also vitamins), 57,98 or where there is concern about a lack of access to healthy or safe alternatives. 33 The paucity of RWE as to their health effects creates a negative loop, enabling opponents to use this information to undermine tax implementation (either blocking the implementation altogether or reducing the suggested tax rate of a 15%-25% increase in the price faced by consumers 88,[99][100][101], further inhibiting the potential to produce RWE. However, other designs may be more acceptable, even as evidence of their effect on health continues to emerge. ...
Full-text available
Context: Poor diet has been implicated in a range of noncommunicable diseases. Fiscal and pricing policies (FPs) may offer a means by which consumption of food and non-alcoholic beverages with links to such diseases can be influenced to improve public health. Objective: To examine the acceptability of FPs to reduce diet-related noncommunicable disease, based on systematic review evidence. Data sources: MEDLINE, EMBASE, PsychInfo, SCI, SSCI, Web of Science, Scopus, EconLit, the Cochrane Library, Epistemonikos, and the Campbell Collaboration Library were searched for relevant studies published between January 1, 1990 and June 2021. Data extraction: The studies included systematic reviews of diet-related FPs and: used real-world evidence; examined real or perceived barriers/facilitators; targeted the price of food or non-alcoholic beverages; and applied to entire populations within a jurisdiction. A total of 9996 unique relevant records were identified, which were augmented by a search of bibliographies and recommendations from an external expert advisory panel. Following screening, 4 systematic reviews remained. Data analysis: Quality appraisal was conducted using the AMSTAR 2 tool. A narrative synthesis was undertaken, with outcomes grouped according to the WHO-INTEGRATE criteria. The findings indicated a paucity of high-quality systematic review evidence and limited public support for the use of FPs to change dietary habits. This lack of support was related to a number of factors that included: their perceived potential to be regressive; a lack of transparency, ie, there was mistrust around the use of revenues raised; a paucity of evidence around health benefits; the deliberate choice of rates that were lower than those considered necessary to affect diet; and concerns about the potential of such FPs to harm economic outcomes such as employment. Conclusion: The findings underscore the need for high-quality systematic review evidence on this topic, and the importance of responding to public concerns and putting in place mechanisms to address these when implementing FPs. This study was funded by Safefood [02A-2020]. Systematic review registration: PROSPERO registration no. CRD42021274454.
... Fiscal instruments, such as taxes or subsidies, can promote healthy behaviors [10][11][12][13][14]. The most important impacts of a higher tax on unhealthy products will be a fall in the demand for these products, and the promotion of healthy lifestyles, which in turn reduces the negative health implications of these products and the ensuing care and treatment costs [15][16][17][18]. ...
Full-text available
Background and aim Levying a tax on harmful products, services, and practices can affect consumer choices, effectively preventing diseases and reducing health care costs. The goal of this study was to investigate the role of taxation as a powerful financial tool in the management of harmful products, services, and practices to maintain and improve public health and preserve the financial sustainability of the health care system. Materials and methods This qualitative study was conducted in 2020–2021. In order to collect information for this study, semi-structured interviews were conducted. Using purposive and snowball sampling methods, 38 managers, policymakers, economists, and key experts were interviewed. Data were analyzed using the content analysis method. The transcribed interviews were further imported into MAXQDA for classification, and relevant codes were extracted. Findings In this study, 6 main themes and 19 subthemes were labeled. The main themes included 1) objectives, effects, and requirements of the taxation of harmful products, services, and practices, 2) definition, instances, elasticity, and grading of harmful products, services, and practices, 3) Problems in controlling harmful products, services, and practices, 4) controlling harmful products, services, and practices, 5) traffic violations and accidents, and social harms, and 6) tax revenue use and the share of health care. The effects of taxing harmful products include reduced access to these products, reduced demand for harmful products, and the promotion of public health. Conclusion Harmful products, services, and practices have major health and financial implications for individuals, families, and society. To improve public health, the demand for these products and services can be controlled through taxation measures to push consumers toward less harmful alternatives.
... The governments purpose of specific taxes is primarily to discourage the consumption of unhealthy products, and then to generate revenue [16]. The use of taxes for a healthier lifestyle is of interest to scientific and academic centers [17], and the WHO has recommended the use of these financial instruments [18][19][20]. Taxes and subsidies are considered in health policies, because unhealthy products are not economically affordable by increasing the price, and as a result, the incentive to consume these products reduce, or by decreasing the price of healthier products, their consumption becomes economically affordable and increases [21]. ...
Full-text available
Background and aim Being the major source of revenue and essential economic tool for policymakers to improve public health, taxes contribute to government spending on the development of health care facilities and services. Given the financial challenges facing the health sector together with the public health issues that affect each society, placing specific taxes on some goods, services, and activities can be effective in this regard. The study aims to explain the various dimensions of specific taxes in the health sector and management of these resources in order to achieve the health system goals. Materials and methods This study with a qualitative research design was conducted using semi-structured interviews with open-ended questions in 2020–2021. In total, 38 managers, policymakers, economists, key experts, and other individuals, as informants, were interviewed. Purposive and snowball with maximum variation was also employed. As well, content analysis was utilized to shed light on the data. The transcribed interviews were further imported into MAXQDA for extracting and classifying the relevant codes. Findings In this study, 5 main themes and 23 subthemes were labeled. The main themes accordingly included “Objectives and Conditions of Specific Health Taxes”, “Earmarked Taxes”, “Taxes on Goods and Measures of Harmful to Health”, “Value-Added Taxes”, and “Green Taxes”. Discussion and conclusion Considering the specific taxes in the health sector, i.e., taxes on goods and measures of harmful to health, value-added taxes, and green taxes, all taxation and pricing policies need to take account of the effects as well as the advantages and disadvantages of types of taxes, a country’s economic structure, the conditions of industries and manufacturing enterprises, cultural aspects in society, and peoples’ socioeconomic status.
Full-text available
Excise taxes are one of the primary tools used to discourage consumption of socially undesirable or unhealthy products. When considering implementation of such taxes, the current policy and academic discussions have focused on potential outcomes due to price changes. In this paper, we document that price changes are only the immediate response to tax policy changes, and in the long run, tax changes can impact product offerings. Using exogenous changes in tax rates from multiple empirical contexts: (1) the Korean soju market and (2) the US cigarette market, we show that a tax increase is followed by a significant drop in number and variety of product offerings. In addition, the change in product assortments post-tax hinges critically on the nature of tax imposed. We find that specific taxes, as opposed to ad valorem taxes, lead to the exit of products with larger pack size. We conduct a simulation experiment and estimate that studies which do not consider assortment changes can result in a 9% upward bias in consumer welfare for large tax increases. Our findings have important policy implications for research examining the impact of taxes on market outcomes.
Obezite ile mücadelede, başvurulan güncel çözüm yollarından biri obezite vergisidir. Kalorisi yüksek ancak besleyici değeri düşük gıdaların fiyatını yükselterek tüketimlerini azaltmak obezite vergisinin ana amacıdır. Obezite vergisi birçok ülkede farklı şekillerde kullanılmaktadır ve Türkiye’de uygulanması son dönemlerde tartışılan bir konudur. Bu makalede öncelikle obeziteden genel olarak bahsedilmiş, ardından obezite vergisinin olumlu ve olumsuz yönlerine yer verilmiş ve daha sonra araştırma bulguları sunulmuştur. Bu çalışmanın amacı, obezite vergisinin Türkiye’de uygulanmasına yönelik görüşleri değerlendirmektir. Araştırma evreni, Ankara’da hizmet veren bir aile sağlığı merkezine 01.04.2019-30.05.2019 tarihleri arasında başvuran 18 yaş ve üzeri hastalardan oluşmaktadır. Araştırma kapsamında gönüllülük esasıyla araştırmayı kabul eden 371 hasta ile görüşme yapılmıştır. Araştırmada, Ayyıldız ve Demirli (2015) tarafından hazırlanan anket kullanılmıştır ve elde edilen veriler SPSS programıyla analiz edilmiştir. Araştırmada kullanılan ölçüm aracının yapı geçerliliği, açıklayıcı ve doğrulayıcı faktör analizleri ile değerlendirilmiştir. Katılımcıların cinsiyetinin obezite vergisini destekleme ihtimalleri üzerinde etkili olduğu sonucuna ulaşılmıştır. Kadınların obezite vergisini destekleme olasılığının daha yüksek olduğu saptanmıştır. Katılımcıların büyük çoğunluğunun obezite vergisini desteklemediği ancak vergi dışında araçlar ve politikalarla obezite ile mücadeleyi gerekli gördükleri bulunmuştur.
Full-text available
Background With the increasing concerns about the health and economic burden attributed to sugar-sweetened beverages (SSBs) consumption, SSB taxation has been proposed and implemented in many countries. Many previous economic evaluations of SSB taxation have shown that this kind of policy is cost-effective. However, the magnitude of impact varies. This study aims to design a comprehensive model to estimate the impact and cost-effectiveness of the SSB tax in Canada. Methods A proportional multi-state life table-based Markov model was chosen to estimate the impacts of SSB tax in Canada. The health-related quality of life (including disability-adjusted life years (DALYs) and quality-adjusted life years (QALYs)), the costs (including health care costs and intervention costs), and the tax revenue were the main health and economic outcomes. We compared the simulated SSB tax with the current practice from the public health care payer perspective, and the tax was applied to the 2015 adult Canadian population up to 100 years. The economic model was built following guidelines from the Canadian Agency for Drugs and Technologies in Health. Results After implementing a CAD$0.015/oz SSB tax, 282,104 cases of overweight and obesity, 210,542 cases of diseases, and 2,189 deaths could be prevented. The simulated SSB tax has the potential to avert 2.3 million DALYs, gain 1.5 million QALYs, and save CAD$32,583 million in health care costs in a lifetime period. The incremental cost-effectiveness ratio for the SSB tax was CAD$ -24,933/QALY. The SSB tax with different tax levels (CAD$0.01/oz and CAD$0.02/oz) remained cost-effective. Conclusion Implementing the SSB tax in Canada is a potential cost-effective policy option for reducing obesity and related chronic diseases. The model built in this study provides a more accurate estimate of health and economic impact of SSB tax and could be used to estimate other sugar tax options.
Obezite son zamanlarda tüm dünyada yaygın görülen bir hastalıktır. Obezite yaygınlık, yayılma ve ekonomik yük açısından ulusal ve küresel halk sağlığı için önemli bir tehdit oluşturmaktadır. Uluslararası alanda devletler obeziteye karşı önlemler almaktadırlar. Bu önlemlerin başında sağlıksız gıdalar üzerinden alınan obezite vergisi gelmektedir. Ancak her ne kadar günümüzde birçok devlet tarafından obezite vergisi uygulanıyor olsa da bu verginin başarısı bireylerin obezite vergisine karşı tutumlarına bağlı olarak değişecektir. Bu bağlamda araştırmanın amacı, obezite vergisinin kabul edilebilirliğine ilişkin faktörlerin lojistik regresyon yöntemlerinden biri olan ikili lojistik regresyon analizi kullanılarak belirlenmesidir. Araştırmada kolayda örnekleme tekniği kullanılarak internet ortamında 504 kişiden veri toplanmıştır. Yapılan analiz sonucunda obezite vergisine ve obezite kültürüne ilişkin görüşlerin obezite vergisinin kabul edilebilirliği üzerinde anlamlı bir etkiye sahip olduğu görülmüştür. Buna karşın; kilo, eğitim, aylık net gelir, gıda tüketimi ve spor alışkanlığı değişkenlerinin ise obezite vergisinin kabul edilebilirliği üzerinde anlamlı bir etkisi olmadığı görülmüştür.
Taxes on fats and sugar‐sweetened beverages are deployed in the developed world to encourage healthier diets. How effective might such fiscal instruments be in emerging economies? We evaluate the impacts of a subsidy for palm oil, introduced as part of the public distribution system in three Indian states. Using variants of the difference‐in‐differences approach, we find that palm oil consumption increased, particularly in rural areas, as a result of the subsidy, and traditional oils were displaced by cheaper palm oil. However, the intervention did not significantly alter overall edible oil consumption. These results are robust to different specifications, alternative estimation samples, and the exclusion of households who may have been potential beneficiaries of other interventions. Impacts were higher in Tamil Nadu than in other states, and were higher for vegetarian households in rural areas. There was only weak evidence of spillover income effects on other food groups. Given India's dual burden of malnutrition, our analysis suggests that fiscal policy interventions have the potential to effectively nudge consumer choices towards healthier edible oil consumption.
Full-text available
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.
Full-text available
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.
Full-text available
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.
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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}, 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.