New IEA research released
In Fat taxes and other interventions won’t cure obesity, researchers Barrie Craven (from the University of Newcastle-upon-Tyne), Michael Marlow and Alden Shiers argue that:
- Eating is essentially a private good and those who over-eat bear the consequences of their decisions.
- The main economic argument for “fat taxes” and other paternalistic measures to reduce obesity is that obesity causes social costs to be borne by the National Health Service. However, research suggests that additional health costs from obesity are offset by reduced costs elsewhere, partly because obese people live shorter lives.
- Fat taxes are regressive and would fall disproportionately on low income groups. They are also an extremely blunt instrument. It is estimated that a 1% tax on fizzy drinks would reduce BMI by only 0.003. It is highly likely that fat taxes would be used as a revenue raising device and not be set at their economically “optimal” levels.
- There are generally unforeseen consequences of “sin” taxes. For example, taxes on cigarettes have encouraged smokers to switch to higher tar brands – and, indeed, the reduction in smoking has played some part in the increase in obesity.
- Other anti-obesity measures are generally ineffective. For example, the banning of sugar-sweetened beverages in some US schools merely led to a transfer of consumption to off-school sites.
- There is an increasing range of private solutions to the obesity problem, including the marketing of “healthy” meals and the provision of greater information. Unlike government initiatives, these developments are not prone to being taken over by rent-seeking groups or to the law of unintended consequences.
Commenting on the publication, researcher Barrie Craven said:
“In a facile attempt to curb a self-inflicted epidemic of obesity in the UK it would be wrong for the government to try to micro-manage the nations eating habits by imposing a tax on fat.
“Such a tax would penalise the poor, be uneconomic, ineffective, discriminate against responsible eaters, and result in various adverse unintended consequences.
“Private industry has responded to the challenge through health clubs, diet brands, dietary books and magazines (all of which show that individuals are concerned about weight) and almost all food products contain information on sugar, fat and calorie content.
“Government intervention, if any, should be limited to supplying objective health information only”
Notes to editors
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