Taxing obesity?
By: Samantha Weinberg and Ryan Santana.
Edited by: Janaki Patel.
Many countries around the world have been trying to tackle the issue of obesity in new and creative ways. One such tactic has been to levy a tax on unhealthy foods so that they are less desirable for consumers. This was implemented in Denmark by the government so that 16 kroner (2.7USD) per kilogram of saturated fats in a product was added to costs. This led to an increase in costs for the producers of these goods and higher overall administrative costs in their attempts to adjust prices accordingly. Unfortunately, this “fat tax” did not have the desired results since it did not deter consumers from purchasing the unhealthy foods. In some cases, people actually crossed the Danish border to get their sweets from countries where it was cheaper without the tax.
The Danish government has announced plans to repeal the tax in light of its failure and has halted works on a sugar tax that was being considered. This failure calls into question what the government can actually do to encourage consumers to make healthy choices. In New York, and some other states, mandates have forced calorie information to be displayed in all restaurants so consumers can at least make more informed decisions. This method does not seem to be making much of a difference either. New York has also been one of the first states to place a ban on super-sized sodas. European countries have also tried to develop new ways to control the problem. One example is Hungary’s higher tariffs on soda and alcohol so the goods are more expensive on the local market.
With obesity becoming a growing problem in the United States and other developed countries the ability to curb this is seen as essential for governments. In light of Denmark’s failed attempt, other governments are questioning their tentative plans to implement similar programs. At some point government will need to decide how much of peoples’ decisions they can actually influence and also decide if it is worth the risk of potentially neglecting other important parts of the economy. The government will also have to ask itself whether it is realistic to control the problem of obesity. At the same time people must also take responsibility for the way they treat their body. There may be ways a government can attempt to deter the option for people to eat junk food but, like in the article stated, there are ways for people to ultimately get what they want.
The next step, as economists, is to try and think of ways that we can influence people’s choices without interfering with the direct interaction between consumers and producers in a negative way that leaves all parties worse off. Although education on nutrition is better than ever before we could probably look into putting more energy and resources in the education of nutrition rather than possibly hurting the market. Educating kids on nutrition at schools and raising awareness about junk food can be a better solution. And while we’re at it we should also inform people about the dangers of non-organic and processed foods. If people know exactly what they are eating then people can make much more informed choices as compared to simply looking at a calorie count on a menu.
Categories: Government Policy
Discussion
Jonathan Burns November 26th, 2012 at 01:10
Janaki November 26th, 2012 at 15:11
I think the culture of eating needs to be reestablished. Nowadays, every package says “healthy”, “natural” and “organic” when there isn’t a distinct standard for the words that are being used. The problem is that people take it as the product will be good for them, but in reality, it’s not because the packaging is misleading. For children, this is extremely horrible because this packaging creates bad eating habits for them.
I think the best route for helping the obesity problem is prevention. Before kids develop bad habits, prohibit the bad habits from happening. Also, public policy for education needs to stop decreasing exercise time for the youth because children need exercise to stay healthy.
Alyssa DiZoglio November 29th, 2012 at 13:45
I agree with the discussion here that the focus needs to be on shifting the culture surrounding eating habits. In this case I do not think that a tax is an effective way to help obesity but rather educating the public, especially children, about healthy living in general can be very beneficial. Children should be more educated about making healthy eating choices, the benefits of eating organic, but also educated on lifestyle choices aside from eating, like exercise. The point raised about misleading packaging labels as “all natural” or “organic” when in fact there is nothing substantial behind these claims is an important point that shows why education about what is really organic or what really makes a difference in your food is important.
With that said I do believe that there is also some initiatives in terms of regulation that can be taken to fight obesity. While a “fat tax” may not be the answer I think that policies such as requiring foods to be made with no trans fats are important policies that could be easily implemented and would make a large difference in overall health.
Samantha Weinberg November 30th, 2012 at 12:54
In looking into this a bit further after reading this article for class, I have realized that government attempts to put in place preventative measures, like the taxes, are widespread. Unfortunately, I don’t think any of them have proven to be successful. Truthfully, the problem might lie in the fact that most people may be more inclined to continue to eat unhealthy foods because they resent the government trying to make those decisions for them. I think that something should be done to combat obesity, but I also think there has to be a better approach. When it all boils down, it is an individual’s choice to purchase unhealthy foods if they want to and the only thing that the government can do is help them make an informed decision. Education is definitely a route to go with this so people are as informed as possible from a young age. Adults who have these habits built up over years are not likely to break them just because a chocolate bar costs them 10 cents extra when they’re purchasing it.
Jonathan Burns December 11th, 2012 at 13:39
In response to Samantha’s response: I don’t think you can claim that “people may be more inclined to continue to eat unhealthy foods because they resent the government trying to make those decisions for them”. While I have no statistical or empirical evidence to go out against you, I think the later part of your response is more in line what the rest of us (even partly you) think about this topic: that people will continue to eat other types of junk food if they can’t eat a certain type…and the way to fix this is through education, not taxes.
This is an intriguing topic that I have seen a fair amount in the news in the past few years. I think that one thing economists and legislators need to focus on is what the actual causality is in these instances. For with many of these instances of taxes on “bad” food to promote healthy living, people mistakenly think that certain “bad” foods are what cause people to be unhealthy/fat. Rather, perhaps the causality is different. Perhaps, there is a characteristic among unhealthy people that makes them want to eat “bad” food and live an unhealthy life. In this case, a specific tax would not necessarily solve much at all. Rather, individuals would just choose to eat other “bad” foods and continue to live unhealthily. I agree with the point you raise in the last paragraph that a more viable solution is probably through education and information to help people change their way living.