Obesity and the Economics of Prevention. Fit not Fat.

The book examines the scale and characteristics of the obesity epidemic, the respective roles and influence of market forces and governments, and the impact of interventions. Some key insights from the book:

  • “The impact of the tax on government and supplier (e.g. food manufacturer) revenues will depend on the elasticity of consumers’ demand for the taxed product”.
  • “Taxes on lifestyle commodities, or sin taxes, tend to be controversial. Critics perceive them as undue interference with individual choice. Governments levying such taxes are sometimes seen as “profiting” from unhealthy behaviours”.
  • “In addition, taxes on consumption are typically regressive, unless consumption is concentrated among the wealthiest, which is certainly not the case for most potentially unhealthy lifestyle commodities, as the consumption of these tends to be concentrated among the less well off. Therefore, tax payments will weigh more heavily on the incomes of the most disadvantaged”.
  • “In addition to distributional effects, imposing taxes on certain forms of consumption may also generate costs, mainly in relation to enforcement. When prices in a market are kept artificially high by taxation, phenomena like parallel trade and smuggling will flourish, which governments must then regulate or repress”.

You can find the whole paper here.

Ineffective consumer behaviour, Taxes unfair, What others say: experts, Franco Sassi, Market forces, OECD