While governments use food taxes to raise revenue, they also justify them on health grounds. Taxes are being considered in Denmark, France, Hungary, and Britain. But what do we know about how consumer choices are influenced by prices?
This international literature review looks at the kinds of evidence that is available to inform policy-makers on food taxes and health. The studies:
- Model different tax/price scenarios—how “elastic” are food prices and do consumers choose substitutes when prices go up? Do obese people respond differently to food prices?
- Ask consumers how they feel about food prices—what motivates people to purchase or presents barriers to not choose certain foods? Some qualitative studies indicate price is an effect when in practice it is not; or that consumers' perceptions of cost are not the same as actual prices.
- Examine the cost per calorie of food—reflecting that “healthy” foods such as fruits and vegetables have a high nutrient-to-price ratio. Perhaps a healthy diet as a whole does not cost more than a less healthy one.
The authors believe a core question yet to be explored is how the food supply chain would respond to food taxes.