Nationwide Health Experiment: The Fat Tax

Denmark is doing something that has never been done before. They are imposing what is known as a “fat tax.” That is, they have decided to raise the cost of fattening products while reducing the price of healthier alternatives, such as fruits and vegetables. Despite the nation being under the European average for obesity, they’re going to great lengths to keep the population healthy. Will this be effective?

If foods contain more than 2.3% saturated fat, they will be subject to the tax. This has apparently led some to begin hoarding fatty foods before the price rise, while others apparently have been considering doing more online shopping. If this is the case, perhaps people will get around the tax. But let’s look at the studies.

There is certainly research to suggest that it would be effective. A study from the University of Minnesota in 2003 had this to say:

Compared with usual price conditions, price reductions resulted in a four-fold increase in fresh fruit sales and a two-fold increase in baby carrot sales. Both studies demonstrate that price reductions are an effective strategy to increase the purchase of more healthful foods in community-based settings such as work sites and schools. Results were generalizable across various food types and populations. Reducing prices on healthful foods is a public health strategy that should be implemented through policy initiatives and industry collaborations.

This is similar to what came out in 2006, from the State University of New York.

Raising the price of healthy or unhealthy foods resulted in decreased purchases of those foods, and income available interacted with price to predict the pattern of substitution of alternative foods. These results show the potential for controlled laboratory studies of price and food purchases, and show that the substitution of healthier for unhealthy food is related to available money.

But research that the Washington Post uses paints a less convincing picture, while explaining the significance of Denmark’s new tax. It turns out that it’s not as simple as it sounds.

“This is a major development for two reasons: It’s an entire country, and they’ve taken on a particular part of the food supply,” says Kelly Brownell, director of Yale’s Rudd Center on Food Policy, who is widely credited with introducing the idea of a soda tax in the 1990s.

The Danish government implemented the tax because it wanted Danes, who lag behind European life expectancy numbers, to get healthier. Will they? The research on “fat taxes” is sparse, but there’s good reason to be skeptical about the potential public health gains.

One thing we do know about food taxes is that they have to be really high to change behavior. Brownell and Tom Frieden, now director of the Centers for Disease Control and Prevention, wrote in a 2009 New England Journal of Medicine article that the 5 percent taxes on unhealthy foods that states tend to pass just don’t cut it. Brownell’s research has found it takes a 1-cent-per-ounce tax to change behavior; anything lower, will do great at bringing in revenue but likely won’t lower soda consumption.

In reducing fat consumption, the bar may prove to be even higher: While soda isn’t generally thought of as a meal, solid foods are a different ballgame, what people eat when they sit down to dinner or lunch. And what little research we have on fat taxes bears this out. A 2007 study form the Forum for Health Economics and Policy modeled the impact of a 10 percent fat tax on dairy products and found unimpressive results.

“Such a tax results in less than a 1 percent reduction in average fat consumption,” the authors found. “To have a substantial effect, the tax rate would have to be quite high. For example, a 50 percent tax only lowers fat intake by 3 percent.”

Moreover, the authors worried that a fat tax would be quite regressive, hitting lower-income families much harder than higher earners. “The welfare loss to a family earning $20,000 is nearly double that of a family earning $100,000,” they found.

Also, some scientists think that saturated fat isn’t even the thing people should be concerned with. Instead, they argue, salt, sugar, and refined carbohydrates should be focused on more. So the situation is indeed more complex and interesting than it sounds on the surface.

And you can be sure that the world will be watching. Especially, I presume, America. Yet I suspect that even with the most robust evidence in front of them, American politicians wouldn’t be able to put laws in place to lower the obesity rate, because America has an impressive system of ridiculous politics when it comes to food. Or anything else, really.

The American right-wing looks at healthy dietary suggestions from the government as “telling Americans what they can eat,” as if saying “the cost of medical charges due to obesity and other diet-related problems can be reduced if you just eat your god damn vegetables” is a bad thing. So I predict that this will be a success in Denmark, but I doubt it will make a dent in other places, particularly the closed-minded ones.

The right-wingers are not just “glass is half empty” folk, but the “and fill it up already” people, too.

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