Sunday, July 2, 2017

Simulating Impacts of Food Taxes and Subsidies

 Just last week I posted about food subsidies. I asked:

"Could you make the argument that simply shifting money toward programs related to fruits and vegetables would have a large enough impact on price to influence consumption? How much money would that take and what would the effect size be?"

This video discusses a PLOS medicine study that finds positive health benefits related to subsidies for fruits and vegetables and the referenced study (from a 'headline' reading) indicates a 10% subsidy could have a meaningful impact on health:

The video makes no direct reference to a study. However based on this reading I think the following are the studies mentioned in the video, the first being the primary reference:

Reducing US cardiovascular disease burden and disparities through national and targeted dietary policies: A modelling study. PLOS Medicine. June 6, 2017

Taxes and Subsidies for Improving Diet and Population Health in Australia: A Cost-Effectiveness Modelling Study. PLOS Medicine. February 14, 2017

Both papers are simulations based on assumptions related to elasticities and projected health outcomes (vs. empirical findings). One thing advocated is to create a revenue neutral policy that taxes soda and subsidizes fruits and vegetables. I'm skeptical, but if I want to give any credit I could say cynically that in this way maybe a soda tax could be useful even if it fails to have any meaningful impact on consumption or health.

See also: 

Are Soda Taxes Effective?
Four Big Questions about Farm Subsidies

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