Food Taxes and Obesity
A tax on groceries would represent a steady stream of tax revenue for state and local governments during periods of adverse economic shocks, such as those observed during the 2019 coronavirus disease (COVID-19) pandemic. Previous research has suggested possible mechanisms through which taxes on groceries may negatively impact health, and we present a study that aims to document spatial and temporal variation in grocery taxes and empirically examine the statistical relationship between county-level grocery taxes and obesity and diabetes.
2009-2016.
We collected a new national dataset of annual county- and state-level grocery taxes and linked this data to three-year county-level estimates based on data on obesity rates from the Centers for Disease Control and Prevention. Using county-level fixed-effects estimators, we estimate the impact of the grocery tax on the incidence of obesity and diabetes, while also controlling for a subset of potential confounders that change over time.
As a result.
We find that a 1% increase in the tax on groceries is associated with 0.588 and 0.2155% increases in county-level obesity and diabetes rates, respectively.
The prevalence of obesity and diabetes was found to be higher in counties with grocery taxes, and the economic burden of increased obesity and diabetes due to grocery taxes can be estimated at $5.9 billion. Based on this estimate, the cost-benefit ratio of eliminating the grocery tax for the entire United States is 1.90, considering only the impact on the incidence of obesity and diabetes.
Wang, L., Zheng, Y., Buck, S. et al. Grocery food taxes and U.S. county obesity and diabetes rates. Health Econ Rev 11, 5 (2021). Available at: https://doi.org/10.1186/s13561-021-00306-2
Summary
The cost-benefit ratio is the ratio of total benefits divided by total costs, and it is a method of analysis to make an "objective evaluation" that a project has a certain cost-effectiveness if the B/C value is greater than 1.
As a result, the study showed that taxing food would increase the number of obese and diabetic patients, and considering the cost of treating them, eliminating the tax would be more cost-effective.
Why would this be the case? According to the study, it is because it is easier to consume foods that are simple, relatively inexpensive, and contain a certain amount of calories, such as processed foods, rather than fruits and vegetables, which are more expensive and subject to taxes.If you imagine in real life, if you try to eat a healthy diet, the cost will be rather high and the only inexpensive food options will be junk, so this result is understandable.
However, it seems that there is a movement to eliminate the taxation of food in the areas of the study, so it depends on how you look at the results. However, for countries that want to tax something, it may not stop them from taxing food that we have the opportunity to buy every day.
