Bulletin of the World Health Organization

The effect of fiscal policy on diet, obesity and chronic disease: a systematic review

Anne Marie Thow, Stephen Jan, Stephen Leeder & Boyd Swinburn

Volume 88, Number 8, August 2010, 609-614

Table 1. Studies on the effects of fiscal policy on food consumption included in systematic literature review

Study and year Study focus Study typea and country Data Taxation change Effect on target Other effects
Peer-reviewed studies
Outcome assessed: consumption
Bahl et al. 200321 Soft drink demand Empirical–ecological, Ireland Sales data Excise tax on soft drinks decreased from IR£ 0.37/gallon to IR£ 0.29/gallon Consumption increase was 6.8%. If whole tax reduction had been passed on, increase would have been 15% Revenue loss approximately IR£ 2 million/year
Jensen & Smed 200722 Food and nutrient consumption Modelling, Denmark Aggregate consumption VAT on fruit and vegetables halved. The following taxes and subsidies were scaled to be equivalent to this reduction: fibre subsidy; taxes on fat, saturated fat and sugar; and revenue-neutral combination Small changes in targeted nutrient and food consumption. Best scenario: revenue-neutral subsidy on fibre and tax on saturated fats and sugar. Sugar consumption decreased 6.5%, fat consumption decreased 2.5%, saturated fat consumption decreased 3.6%, and fibre consumption increased 6.5% None noted
Santarossa & Mainland 200323 Nutrient consumption Modelling, Scotland Household consumption Tax rates needed to change nutrient consumption to meet recommendations; taxes increased the price of meat by 1%, of dairy products by 4%, of eggs by 11%, and of fats and oils by 24% Energy consumption decreased 17.5%; fat consumption decreased 20% None noted
Smed et al. 200724 Food and nutrient consumption Modelling, Denmark Household purchases Price of meat, butter and fat increased by 5%; VAT on fruit and vegetables halved. The following modelling scenarios were all scaled to have an equivalent effect on consumers as the above VAT reduction: fibre subsidy; taxes on fat, saturated fat and sugar; and revenue-neutral combinations More effective to target nutrients than foods. Best scenario: saturated fat and sugar tax plus fibre subsidy resulted in a sugar consumption decrease of 16%, saturated fat consumption decrease of 8%, and increased fibre consumption of 15% Younger consumers and lower income groups responded more, especially in saturated fat consumption
Outcome assessed: consumption and body weight
Chouinard et al. 200725 Dairy product demand Modelling, USA Household purchases 10% and 50% tax on dairy products by fat content Daily fat intake decreased by 2–3 g with 50% tax; no noticeable effect on weight Highly regressive
Kuchler et al. 2004,26 200527 Snack food consumption and body weight Modelling, USA Household purchases Salty snack food excise taxes: 1 US cent/pound weight (i.e. 0.4%), 1% and 20% 1 US cent/pound weight and 1% tax had no effect on consumption or body weight; 20% tax decreased body weight by 115–170 g/person per year, equivalent to a reduction in energy intake of around 830 calories. 1 US cent/pound weight gave US$ 40 million revenue; 1% tax gave US$ 100 million; 20%  gave US$ 500–700 million
Outcome assessed: consumption and disease
Cash et al. 200528 Fruit and vegetable demand and heart disease risk Modelling, USA Individual consumption Subsidy to decrease fruit and vegetable prices by 1% Prevented 6733 cases of coronary heart disease and 2946 cases of ischaemic stroke Average cost per life saved was US$ 1.29 million
Marshall 200029 Saturated fat consumption and heart disease risk Modelling, United Kingdom Individual consumption Extend 17.5% VAT to main sources of saturated fat Decreased ischaemic heart disease by 1.8–2.6%, equivalent to 1800–2500 deaths/year, with 900–1000 deaths/year in people under 75 years None noted
Mytton et al. 200730 Nutrient consumption and heart disease risk Modelling, United Kingdom Individual consumption Extend 17.5% VAT to: (i) sources of saturated fat, and (ii) unhealthy foods; (iii) modification of the above for the best health outcome (i) increased CVD deaths due to increased salt intake; (ii) decreased CVD deaths by 1.2%; (iii) decreased CVD deaths by 1.7% Best scenario increased food expenditure by 4.6%.
Nnoaham et al. 200920 Nutrient consumption and CVD and cancer mortality Modelling, United Kingdom Individual consumption Extend 17.5% VAT to: (i) sources of saturated fat; (ii) unhealthy foods (nutrient profiling); (iii) unhealthy foods, with 17.5% fruit and vegetable subsidy; (iv) unhealthy foods, with all tax revenue going to a fruit and vegetable subsidy (i) no mortality reduction; (ii) CVD and cancer deaths increased by 35–1300 per year; (iii) up to 2900 CVD and cancer deaths averted per year; (iv) up to 6400 CVD and cancer deaths averted per year All policies would be economically regressive and positive health effects would not necessarily be greater in lower income groups
Outcome assessed: body weight
Asfaw 200731 Subsidized food and mothers’ BMI Empirical–ecological, Egypt Household consumption Food subsidy programme: 57% for bread; 42–62% for sugar 1% price increase in bread decreased BMI by 0.12%; 1% price increase in sugar decreased BMI by 0.11%; 1% price decrease in fruit and vegetables decreased BMI by 0.09%; 1% price decrease in eggs and milk decreased BMI by 0.14% Cost US$ 1.1 billion in 1997 values
Kim & Kawachi 200615 State taxes and obesity Empirical–ecological, USA Obesity prevalence State taxes on soft drinks or snack foods No association with obesity point prevalence; states with no tax were more than 4 times as likely to experience a high relative increase in obesity prevalence; those that repealed a tax were more than 13 times as likely None noted
Schroeter et al. 200832 Body weight Modelling, USA Individual consumption 10% tax or subsidy: (i) tax on food away from home; (ii) tax on soft drinks; (iii) subsidy for fruit and vegetables; (iv) subsidy for diet soft drinks Daily weight change: (i) 0.196% increase; (ii) 0.099% (0.086 kg) decrease in men and 0.122% (0.091 kg) decrease in women; (iii) 0.222% increase: 0.193 kg in men and 0.166 kg in women; (iv) 0.071% decrease None noted

Grey literature
Outcome assessed: consumption
Dong & Lin 200933 Fruit and vegetable demand Modelling, USA Household purchase 10% subsidy for fruit and vegetables for people on low incomes Household fruit consumption increased by 2.1–5.2% and vegetable consumption, by 2.1–4.9% Cost: US$ 308 million for fruit subsidy, US$ 274 million for vegetable subsidy
Gabe 200834 Soft drink consumption and economy Modelling, USA Sales data Excise tax: US$ 0.42/gallon of bottled drinks and US$ 4.00/gallon of soft drink syrup; equivalent to around a 10% tax Soft drink sales volume decreased by 4.8% and sports drink volume decreased by 3.2% Revenue: US$ 31.4 million; jobs lost with decreased production
Gustavsen 200535 Soft drink consumption Modelling, Norway Household purchases Doubling of production tax and VAT on soft drinks; price increased by 27% Top 5% of soft drink consumers decreased consumption by around 44%, or 74 l/year; lowest soft drink consumers decreased consumption by 17%, or 2 l/year None noted
Nordström & Thunström 200736 Nutrient consumption Modelling, Sweden Household purchases Removal of VAT plus subsidy for healthy grain products 50% subsidy required to increased fibre intake to recommended level; 114% tax on bakery and ready-to-eat products could fund this subsidy Increased fat, salt and sugar intake
Tefft 200837 Soft drink expenditure Empirical–ecological, USA Household purchases State soft drink tax Soft drink tax increase of 10% decreased probability of soft drink expenditure by 0.7% None noted
Outcome assessed: consumption and body weight
Allais et al. 200838 Complete food demand system Modelling, France Household purchases 10% VAT increase for cheese and butter products, sugar and fat products, and ready-made meals All tax rises decreased total energy and saturated fat intake; taxing both sugar and fat products and cheese and butter products increased polyunsaturated fat use; taxing all three food groups gave weight decrease of 1.3 kg/year Ready-made meal tax increased fat-soluble vitamin intake and decreased sodium, vitamin B and good fat intake; government revenue increased by 16%
Fantuzzi 200839 Soft drink consumption and body weight Modelling, USA Household purchases 20% ad valorem tax and 10 US cent/calorie tax on soft drinks Insignificant impact: e.g. for Pepsi, 20% tax decreased energy intake by 4 258 calories/year and body weight by 1.22 lb/year; 10 US cent/calorie tax decreased energy intake by 3002 calories/year and body weight by 0.89 lb/year 10 US cent/calorie tax would result in US$ 9 tax on an average can of soft drink containing 90 calories
Farra et al. 200540 Soft drink consumption and body weight Modelling, USA Obesity prevalence 10% excise tax on sugared soft drinks Per capita consumption decreased by 23 l (6 gallons)/year, equivalent to a weight loss of 1.4 kg (3 lb); 4% decrease in obesity prevalence Regressive tax
Outcome assessed: consumption and disease
No studies found.
Outcome assessed: body weight
Fletcher et al. 200841 State taxes and obesity Empirical–ecological, USA Population BMI data from the BRFSS State soft drink taxes; average 3% 1% tax increase decreased BMI by 0.003 points Largest impacts in low and high income earners at the tails of the distribution and in Hispanic –Americans
Gelbach et al. 200742 Food consumption and body weight Modelling, USA Individual BMI, price data 100% tax on unhealthy foods Decreased average BMI by around 1% and decreased incidence of overweight by 2% and obesity by 1% Very small differences in price sensitivity with education, race and gender
Oaks 200543 State snack tax and obesity Empirical–ecological, USA Obesity prevalence data from the BRFSS State tax of 5.5% on soft drinks and snacks No relationship between obesity and state tax None noted

BMI, body mass index; BRFSS, Behavioural Risk Factor Surveillance Survey; CVD, cardiovascular disease; IR£, Irish pounds; USA, United States of America; VAT, value added tax.

a Empirical–ecological studies are based on observed outcomes; modelling studies are based on predicted outcomes.

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