Socio-economic characteristics and the effect of taxation as a health policy instrument

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This paper analyses the quantitative effects of using economic instruments in health policy on the

basis of price elasticities calculated from estimated demand systems. The nutritional effects of various

taxation schemes are compared for households in different age groups and social classes. Focusing

on the consumption of saturated fats, fibre and sugar; it is generally found that the impact of price

instruments is stronger for lower social classes than in other groups of the population. With regard

to age groups, it is mostly the youngest that decrease their demand for saturated fat in response to

price changes, while it is mostly the middle-aged who exhibit price responsiveness in their demand

for sugar. These groups are however not considered as key target groups for dietary regulation; thus

tax instruments may be effective in improving diets on average, but the design of the instruments and

the targeting of vulnerable groups with special needs should be done with care. It should be noted

that a tax on a single nutrient or food may have undesired effects on the demand for other food components,

though this may be avoided by introducing taxes/subsidies on several food products


Original languageEnglish
JournalFood Policy
Issue number5-6
Pages (from-to)624-639
Number of pages16
Publication statusPublished - 2007

ID: 8082343