By Ellen Feldman, MD
Altru Health System, Grand Forks, ND
SUMMARY POINTS
- This systematic review and meta-analysis, commissioned by the World Health Organization, examines the effects of food subsidies and taxes on economic and health outcomes, such as consumption patterns and diet change.
- Almost all the food subsidy studies involve fruit and vegetable subsidies in low-income areas.
- Most of the studies looking at the effect of food taxes derive from Mexico’s “nonessential energy-dense” food tax.
- Sales of fruits and vegetables increased with subsidies, but the percentage increase was not directly proportional to the subsidy (“inelastic demand”).
- There was no significant change in reported measurable consumption of the subsidized items.
- Food taxes are associated with reduced sales, but there is limited evidence on change in consumption or health outcomes.
SYNOPSIS: The World Health Organization sponsored this systemic review and meta-analysis to analyze the effect of food subsidies and taxes on population-level changes in diet and health outcomes.
SOURCE: Andreyeva T, Marple K, Moore TE, Powell LM. Evaluation of economic and health outcomes associated with food taxes and subsidies: A systematic review and meta-analysis. JAMA Netw Open 2022;5:e2214371.
The term inelastic is an economic term referring to the static quantity of a good or service when its price changes. Inelastic demand means that when the price goes up, consumers’ buying habits stay about the same, and when the price goes down, consumers’ buying habits also remain unchanged.1
A comprehensive investigation funded by the Gates Foundation and conducted in 195 countries in 2017 uncovered the grim reality that dietary habits are the primary risk factor for deaths worldwide, even surpassing tobacco smoking. This survey pinpointed high sodium intake and low intake of whole grains, nuts, seeds, fruit, and omega-3 fatty acids as being responsible for a staggering 11 million deaths in 2017. Such research has driven the call for public policy changes to incentivize healthier diets.2,3
To aid in this effort, the World Health Organization (WHO) and other international organizations have proposed guidelines for optimal nutrition. These guidelines focus on limiting the intake of sodium, trans fatty acids, and sugars, while increasing whole grains, fruits, and omega-3 fatty acids. It is clear that dietary changes are essential to improving global health.4
However, how to incentivize individuals to improve diet is not so clear. With this question in mind, the WHO commissioned a systematic review and meta-analysis to analyze the effect of real-world public policy changes on food prices, sales, consumption, diet changes and health outcomes at population level among member nations.
After screening almost 40,000 articles regarding public policy changes in food pricing and associated outcomes, 54 studies meeting inclusion criteria were identified. Out of these, 35 (64.8%) involved food subsidies, and 30 of those targeted fruits and vegetables. The remaining five food subsidy studies looked at “healthy food” subsidies, including whole grains. Most of these food subsidy studies were from the United States and usually covered individuals in federal food assistance programs.
The remaining 19 studies involved food taxes. They were based primarily in Mexico, with the remainder from the United States (three studies involving state sales tax), Denmark (five studies regarding a saturated fat tax), and Hungary (two studies regarding public health initiative.)
The most common outcome studied was sales, with only five small studies looking at health outcomes, including undernutrition.
The heterogeneity of the sample provided a challenge; meta-analysis was conducted only when study quality and outcomes (as well as other factors) matched closely enough to make this feasible. None of the food tax studies or food subsidies, other than fruit or vegetables, were able to be included in the meta-analysis.
Unlike most of the studies covered in the systematic review, the 15 studies included in the meta-analysis had an experimental design — either randomized or nonrandomized.
RESULTS
The results are summarized as follows:
- Price elasticity of demand/sales for fruits and vegetables: -0.59 (95% confidence interval [CI], -1.04 to -0.13; P = 0.02).
This result means that a 10% lowering of price via subsidy was associated with a 5.9% increase in sales for the subsidized items (fruit and vegetables.) Andreyeva et al noted a suggestion of publication bias affecting these findings.
- Price elasticity for consumption of fruits and vegetables: -0.17 (95% CI, -0.49 to 0.15; P = 0.16 [non-significant]).
This result means that a 10% lowering of price via subsidy was associated with a 1.7% increase in consumption of the subsidized items (fruit and vegetables.) No publication bias was noted.
Further results are summarized in Tables 1-3.
Table 1. Fruit and Vegetable Subsidy Studies (Other Than Those Included in the Meta-Analysis) |
||
| Study Type | Number of Studies | Results (Summary) |
Sales (fruit and vegetables) |
3 |
Marginal to significant increase |
Consumption (fruit and vegetables) |
9 |
Mixed (no change to slight increase) |
Pricing (fruit and vegetables) |
4 |
Mixed (one study shows lower prices) |
Changes in diet |
4 |
One study demonstrated better-quality diet without caloric change, two studies showed no change, and one study showed higher nutrient intake, such as vitamin C. |
Health outcomes |
3 |
Two studies show no change to body mass index and one study showed increased folate level at 12 months. |
Table 2. Subsidy of Foods Other than Fruits and Vegetables |
||
| Study Type | Number of Studies | Results (Summary) |
Sales |
4 |
Nonlinear increase in sales of subsidized items; for example, a 25% subsidy was associated with a 6.36% increase in sales |
Health outcomes |
2 |
No significant change in body mass or undernutrition |
Table 3. Summary of Food Tax Results |
||
| Study Type | Number of Studies | Results (Summary) |
Sales of nonessential energy-dense food tax in Mexico |
9 |
Sales of taxed foods reduced more in low-income than higher income households; mixed findings on purchases of substitute items |
Sales in Denmark, Hungary, and the United States |
7 |
Sales of taxed foods reduced more in low-income than higher income households; mixed findings on purchases of substitute items |
Health outcomes |
3 |
Inverse association between taxes on snack foods and body mass index in recent high-school graduates in one study and no association with body mass index in two studies |
COMMENTARY
This comprehensive review and meta-analysis highlight the importance of following scientific processes to determine effectiveness of policies with the intent of improving health. It is commendable that the WHO commissioned this study to determine if current efforts to improve diet (and health) via financial incentives result in meaningful change. This investigation suggests that current policies are not fully successful in this manner. Another clear message from this study is that there are not enough well-conducted investigations regarding diet and health outcomes to truly evaluate the effectiveness of food subsidies and taxes. This is an acknowledged major limitation of the current study and reflects the need for comprehensive, large-scale experimental studies regarding this issue. Additionally, such studies will have more power if broadened to participants from all facets of life; at this time, most studies of the food subsidies are conducted only in low-income areas. Although this may indicate the area of highest need, a true understanding of the effect of policy changes will flourish with a diverse study group.
From the results we do have, it appears likely that larger subsidies are required to significantly affect sales and consumption of targeted goods. However, there simply are not enough data regarding economic influences, diet patterns, and health outcomes to draw firm conclusions about the effect of subsidies on overall health. For example, an increase in eating a particular healthy food item may be offset by a parallel increase in eating unhealthy items or other unforeseen “side effects;” more data are crucial to understanding the entire picture.
An example of this point can be found in the experience of the Danish with a saturated fat food tax that was repealed one year after taking effect in 2011. Studies have found the tax was associated with a 4% decrease in saturated fat consumption and an increase in vegetable consumption, but also an increase in salt intake. The tax also was associated with an increase in cross-border purchases within neighboring countries. Interestingly, the motivating factors behind both the introduction and repeal of the tax seemed driven more by economic rather than health factors.5
The take-home message from this study for the primary care provider is subtle. At first glance, this study is looking solely at the effect of public policy changes. A second and deeper look can serve to remind providers of the importance of systematically evaluating the effect of a specific intervention and collecting relevant data to do so. Additionally, the study shines a light on the critical role food and diet play in overall health and wellness, a concept very relevant to a holistic clinical practice.
REFERENCES
- Hussain A. What is inelastic? Definition, calculation, and examples of goods. Investopedia. Updated Aug. 23, 2022. https://www.investopedia.com/terms/e/inelastic.asp
- GBD 2017 Diet Collaborators. Health effects of dietary risks in 195 countries, 1990-2017: Asystematic analysis for the Global Burden of Disease Study 2017. Lancet 2019;393:1958-1972.
- Chaloupka FJ, Powell LM, Warner KE. The use of excise taxes to reduce tobacco, alcohol, and sugary beverage consumption. Annu Rev Public Health 2019;40:187-201.
- World Health Organization. Healthy diet. Updated April 29, 2020. https://www.who.int/news-room/fact-sheets/detail/healthy-diet
- Smed S, Scarborough P, Rayner M, Jensen JD. The effects of the Danish saturated fat tax on food and nutrient intake and modelled health outcomes: An econometric and comparative risk assessment evaluation. Eur J Clin Nutr 2016;70:681-686.
The World Health Organization sponsored this systemic review and meta-analysis to analyze the effect of food subsidies and taxes on population-level changes in diet and health outcomes.
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