Cost-effective design of economic instruments in nutrition policy

Abstract

This paper addresses the potential for using economic regulation, e.g. taxes or subsidies, as instruments to combat the increasing problems of inappropriate diets, leading to health problems such as obesity, diabetes 2, cardiovascular diseases etc. in most countries. Such policy measures may be considered as alternatives or supplements to other regulation instruments, including information campaigns, bans or enhancement of technological solutions to the problems of obesity or related diseases. 7 different food tax and subsidy instruments or combinations of instruments are analysed quantitatively. The analyses demonstrate that the average cost-effectiveness with regard to changing the intake of selected nutritional variables can be improved by 10-30 per cent if taxes/subsidies are targeted against these nutrients, compared with targeting selected food categories. Finally, the paper raises a range of issues, which need to be investigated further, before firm conclusions about the suitability of economic instruments in nutrition policy can be drawn.

The public health impacts of a fat tax

“…They combine this with a subsidy on healthy food which is either at the same rate as the VAT or at a higher rate which is designed to make the policy revenue neutral. Jensen and Smed (2007) also consider a variety of combinations of taxation and subsidy. In their case the fat tax is based on the amount of fat that is present in a particular food type and their subsidy is a either based on the amount of bre in a product or a blanket reduction in VAT on fruit and vegetables.…”

“…3 Our approach combines aspects of both of these approaches. Like Jensen and Smed (2007), we vary the fat tax rate according to the fat content to assess whether this more targeted approach is more e ective than that of Nnoaham et al (2009) which has the merit of administrative simplicity. We increase the price of fatty foods by 1% for every percent of saturated fats they contain; for instance, milk which contains 1.72% of saturated fats will see its price increasing by 1.72%.…”

“…Whilst many 2 studies (eg Chouinard et al;Kuchler et al; nd that the impacts of a scal intervention on consumption are likely to be modest, these authors stress that a fat tax would be a useful tool to generate a revenue that could be allocated to prevention or information campaigns. In this vein and using Danish data, Jensen and Smed (2007) investigate the e ects of nutrient-and food-based taxes, coupled with subsidies in order to produce revenue-neutral scenarios. In line with other studies, they nd that dietary e ects would be minimal, but, as far as nutrient intake is concerned, better results are obtained by focusing the tax on nutrient content rather than on speci c food items (e.g., saturated fats vs. red meat).…”

Obesogenic environments – aspects on measurement and indicators

“…Both methods rely heavily on assumptions and are inherently uncertain. Third, dynamic interactions within and between individual and societal levels complicate the (72) Share of schools with a ban on the sale of soft drinks and candy von Haartman (2006) (63) Presence of nutrition guidelines for school meals (free or subsidised) and share of schools complying with guidelines Donnelly et al (1996) (69) ; Luepker et al (1996) (70) Work (86) ; French (2003) (88) ; Horgen and Brownell (2002) (89) interpretation of results (15) . Multilevel studies are beginning to be performed, addressing both individual-level determinants and area characteristics.…”

The health benefits of selective taxation as an economic instrument in relation to IHD and nutrition-related cancers

“…In the area of nutrition policy, applying differential or selective taxation to healthy and unhealthy food commodities has often been suggested as an economic instrument to encourage the population to eat a healthier diet and thereby improve public health (3)(4)(5) . Only limited research exists regarding how price influences the demand for food commodities and how a population's diet will be affected by selective taxation (6)(7)(8) .…”