Smart SpendingSmart Spending

Study: Junk-food tax might work

Confronted with lower prices on healthful food, shoppers bought more. Then they spent their savings on junk food.

By Teresa Mears Mar 15, 2010 3:13PM

If healthful food were cheaper, would people buy more of it and less junk food?

 

Probably not, says a new study from the University of Buffalo. That same study found that a tax on junk food might be more persuasive.

 

"People are just more responsive to price increases than decreases," Dean Karlan, a behavioral economist at Yale University, told National Public Radio, which reported on the study during Monday’s "Morning Edition."

 

The study took 42 mothers and created a fake “supermarket” in the lab. Each mother was given $22.50 per household member and told to shop for a week’s worth of meals. Half the mothers had family incomes above $50,000 per year, and half had incomes below. Forty percent of the women were defined as obese, with body mass index measurements of 30 or above, and 60% were of normal weight.

The researchers set up five shopping scenarios: real grocery store prices; discounts of 12.5% on healthful items and 25% on healthful items; and price increases of 10% on unhealthful items and 25% on unhealthful items.

 

When the prices of healthful items were lower, the shoppers did buy more of them. Then they used the money they saved to buy more junk food. The reactions of the obese and non-obese shoppers didn’t vary significantly.

The results of the study appear in the current issue of the journal Psychological Science.

 

Another recent study found that an 18% tax on soda and pizza would lower U.S. adults’ average weight by 5 pounds a year. That study appeared in the Archives of Internal Medicine.

 

Karen Kaplan wrote in The Los Angeles Times’ Booster Shots blog:

“This has got to be the most persuasive study to date showing that a sin tax on soda or junk food would actually have the desired effect -- and not just aggravate people who care to indulge in an occasional root beer (or threaten their sense of personal freedom). “Soda tax advocates may embrace it as proof that their policy goals are justified.”

She cautioned: “But keep in mind -- this is only a model, and models don’t necessarily reflect the real world.”

 

Commenters at Booster Shots were, predictably, divided.

 

“I am sure that many would lose weight, if they started to consume less junk food,” wrote “Marina.”

 

But Todd Messer disagreed. He wrote: “Anyone who believes taxing food to control consumption belongs on another planet or at least deserves to live in communist China. You are insane if you think targeting a couple of food items will solve the obesity problem in this country. Why not look at it from another angle and get out of the business of trying to control people’s lives. If we didn't give free health care to people who don't take care of themselves they might just take better care of their health.”

 

Several pointed out that government subsidies effectively keep junk-food prices lower. (Thanks to Kim Peterson of MSN’s Top Stocks for finding this great graphic at The Consumerist on why a salad costs more than a Big Mac.) A reader named “DanR” wrote:

Implement a junk food tax? The government has been subsidizing corn, wheat and soybeans for years. This has made price of foods with high fructose corn syrup (soda, candy), hydrogenated fats and corn-fed meats (fast food) artificially low. Why do you think junk food is so cheap? A better approach would be for the government to shift their agriculture subsidizes to healthier food stuffs, and make healthy foods cheaper.

What do you think? Should the government tax junk food, end the subsidies that make unhealthful food cheaper or find a way to lower the price of fresh fruits and vegetables? Or is there a better approach to improve Americans’ health? What about national cooking lessons?

 

How do you maintain a healthy diet on a budget?

 

Related reading:

7Comments
Nov 29, 2010 1:36PM
avatar
I think they should tax beer.  Hit the people right where you need to, so to motivate them to vote the idiots out in office who support this stuff. 

Tax sports as well, then people will start to care about their constitutional rights.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT SMART SPENDING

Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.

VIDEO ON MSN MONEY

TOOLS

More