The Impact of Price Based Health Interventions on the Black Community: Sugar Sweetened Beverage Taxes, Meat Taxes and the Like
Frankly, the Black community must be concerned with obesity because of its painful and often deadly relationship to chronic diseases like arthritis, diabetes, and cardiovascular diseases and its subsequent impact on families and communities. Compared to White Americans, Black people with these conditions are more likely to die because they are less likely to have access to higher quality health care. For the U.S. Government, it is obesity’s $1billion cost to Medicare and Medicaid that has earned it the label, ‘public health crisis’ (Harding, & Lovenheim, 2017). Given politicians’ and the Black community’s differing framings of the problem of obesity: public policy solutions and the wellbeing of the Black community are often misaligned. Let’s contextualize this problem. The prevailing logic of price based intervention passes the test for face validity: raising prices for unhealthy foods should influence people to consume less of those foods, resulting in better overall health (Webber, 2017). However, the impact of these policies has much more complex effects. For instance, Finland raised taxes on sweets by 14% yet, consumptions only decreased marginally. Denmark also increased its taxes with only marginal outcomes (Webber, 2017).
It’s not the snickers, it’s the sugar…okay maybe both!
One thing that policies of the past did not consider is consumer substitution. Consumers often switch to cheaper substitutes when products that are taxed heavily. If a Hawaiian Punch is a bit too much, then a Tahitian Treat or a Shasta may work instead. This is why poor dietary habits and health outcomes remain resilient. Some consumers challenge the laws and even the geography of taxes on their calories. The Danish government found that it was losing money as people began to increase their illegal sale of soft drinks, while others crossed into neighboring countries (Germany and Sweden) to purchase their soda without the high taxes (Webber, 2017). To avoid the substitution problem, Harding & Lovenheim (2017) suggest that misguided product based taxes be replaced by nutrient specific taxes. They hypothesize that a product based tax (i.e. on soda) would be far less effective than a nutrient tax (i.e. a tax on sugar). They propose the creation of nutritional clusters of product types (diet and regular soda, sliced bread and pastries, candy and cookies). Based on their predictive research using Nielson Homescan consumer data, they found that while a product-specific tax on soda may decrease total purchased calories by 4.84% and sugar consumption by 10%, a 20% sugar tax decreases total calories by 18% and sugar by 16%. This would limit the substitution effect.
Price shifts may also have differential impacts within racial populations. Pitt & Bendavid (2017) developed a model to predict the 15-year impact of increases in meat prices. They found that only extreme price increases (greater than 25%) would actually result in reductions in obesity (Pitt & Bendavid, 2017). Additionally, they found that increasing meat prices resulted in higher life expectancies, although the impact was not felt evenly across race. White male and Black females benefited the most. The authors theorize that this is in part because the benefit was greatest among those who were overrepresented among the initially overweight, and the fact that they were more likely to avoid mortality at elevated body mass indexes. Black males benefited the least because more of them shifted into the category of low Body Mass Index (BMI), while their risk for mortality as a group is greater at low BMIs compared to other groups. This research suggests that more targeted interventions be undertaken instead of relying on broad-based product and/or nutrient taxes. This is only part one of a set of articles on this topic, stay tuned.
Harding, M. , & Lovenheim, M. (2017). The effect of prices on nutrition: Comparing the impact of product- and nutrient-specific taxes. Journal of Health Economics, 53, 53-71.
Pitt, A. , & Bendavid, E. (2017). Effect of meat price on race and gender disparities in obesity, mortality and quality of life in the us: A model-based analysis. PLoS One, 12(1).
Webber, P. (2017). Nobody loses fat on sugar taxes-especially governments. The Times and Transcript, March, 7th, p. A.9.