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How could a ‘fat tax’ impact public health?

Author: Richard Tiffin
Institution: University of Reading
Type of case study: Research

About the research

A lot of public health research has focused on analysing the impact of average daily food consumption on various human activities. Arguably, however, the diets of real concern are those which are some distance away from the recommendations of health experts. Taxes might have a limited impact on such diets, and as a result, on our health. This study measures whether a tax intervention can have an impact on diet-related disease risks, accounting for the full range of diets that one might follow.

More specifically, this project measures the impact of a tax on saturated fats, coupled with a subsidy on fruit and vegetables, designed so as to create a revenue-neutral scheme. The project further explores the impact of such a tax policy in terms of conforming to the Department of Health guidelines, but also in respect to the risk of being affected by diet-related diseases in the long term. In addition, a system that estimates demands in the market and reflects the tax influence is used. This forms the basis for another model that simulates the effects of the price changes that the tax intervention has caused.

The study’s findings suggest that the subsidy on fruit and vegetables brings the mean levels of their consumption in line with dietary recommendations. However, the tax is insufficient to achieve fat intake that conforms to dietary recommendations. Once the changes in diet are converted into changes in the risks of disease, the impacts of the policy are negligible.

A substantial part of the population continues to consume an unhealthy diet. Tax-based interventions should be considered amongst a series of policy interventions, which also include policies which aim to improve the poorest of diets.

Methodology

Demand equations are estimated with data collected from 6,760 households in the Living Costs and Food Survey. The model is used to simulate the impact of a policy in which a tax based on saturated fat content is combined with a subsidy on fruits and vegetables. Changes in consumption are used to compute the effects on the risks of a range of diet-related disease using measures of relative risk. In contrast with other studies, we simulate the impacts of the fiscal regime at the level of the individual households in the sample.

Publications

This research is published in the following journal:

Tiffin, R. and Arnoult, M. (2011) ‘The public health impacts of a fat tax’, European Journal of Clinical Nutrition, 65(4), pp. 427–433. doi:10.1038/ejcn.2010.281