Obesity and Taxes

Cigarette taxes have proved to be an effective strategy to reduce smoking, so one might think (as many experts do) that soda taxes would be an effective strategy to reduce obesity. Consumption of soft drinks seems to be an important risk factor for obesity, and people are sensitive to the price of their colas.

Moreover, soda taxes reflect the lessons of behavioral economics. People often over-indulge in activities that provide short-term gratification but impose significant harm in the long-term. Imposing a tax on unhealthy drinks supplies an immediate disincentive to the consumption of those drinks and can overcome the difficulty people have in postponing gratification. 

However, two new articles in Health Economics question the effectiveness of soda taxes. One study based on UK data, the other on US data, come to the same conclusion--we should not expect much of an impact from taxes on sugary soft drinks. It seems that raising taxes on some beverages simply results in consumers switching to other beverages and replacing the forgone calories with other calories. And to make things worse, beverage taxes often are regressive.

The news is disappointing and adds to a growing list of disappointing policies for weight loss. Under the Affordable Care Act, for example, restaurants must disclose calorie information to customers. With better information, diners would know which salads really are healthy and which others are not. But researchers have not found mandates for calorie disclosure by restaurants (as in New York and Seattle) to be effective.

Legislative fixes for obesity are tempting and probably necessary. But lawmakers need to take better account of medical understanding before they act.

[cross-posted at PrawfsBlawg and orentlicher.tumblr.com]