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Cost Effectiveness of Soda Taxes

In a piece for Cato, Christopher Snowden discusses the effectiveness (or lack thereof) of soda taxes that seem to be gaining traction worldwide.  Snowden's views closely mirror my own.  I like the way he framed the relative effectiveness of soda taxes in this passage:

“Whilst the benefit remains forever on the horizon, the cost can be easily calculated; it is simply the amount of money squeezed from consumers by the tax. In New Zealand, for example, advocates claim that a 20 per cent tax on soda would save 67 lives per year and raise $40 million (NZ).[12] Leaving aside the reliability of the New Zealand forecast, this works out as a cost of $600,000 (NZ) for every life that is extended and does not represent good value for money.

Political action on public health grounds is often justified by the costs of unhealthy lifestyles to the healthcare system, and therefore to the taxpayer. The economic costs of obesity are often misrepresented and fail to account for savings to taxpayers, but even if they were more reliable it is far from obvious that additional taxes would relieve the economic burden.[13] For example, the UK’s Children’s Food Campaign recently claimed that a 20 per cent tax on sugary drinks would reduce healthcare costs in London by £39 million over twenty years, but their own figures suggest that the tax itself will relieve Londoners of £2.6 billion over the same period.[14] The cost of the tax will therefore exceed the savings by several orders of magnitude.”

By the way, if you want to see which (out of more than 100) action will produce the biggest bank for your buck, check out the work of the Copenhagen Consensus, which routinely conducts cost-benefit analysis on a whole set of issues.  See their list for the most cost-effective actions.

Food Demand Survey (FooDS) - March 2016

The March 2016 edition of the Food Demand Survey is out.

Some results from the regular tracking portion of the survey:

  • Willingness to pay for steak and chicken breast was up; willingness to pay for pork chops and ham was down
  • Consumers expectations for beef and pork price increases are markedly lower than was the case a year ago
  • There was an increase in awareness and concern for animal welfare issues this month, particularly battery cages; E. coli was less visible in the news this month and less of a concern this month compared to last.
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A few new ad hoc questions were added this month.  

First, all respondents were asked the question, “Compared to five years ago, would you say you are spending more or less time engaged in the following activities during a typical day?”  Individuals were presented with seven categories ranging from about 45 minutes less to about 45 minutes more.  Overall, respondents reported spending more time shopping for food and eating at home.  About the same amount of time reported being spent on cleaning dishes and on cooking.  Slightly less time was reported spent watching TV and reading about food.  Less time was reportedly spent eating away from home.

Second, one group of respondents was directly asked three questions for which there might be some sensitivity regarding the answer or where there might be social pressure to respond in particular ways.  The direct questions were: 1) “Last week did you buy organic food?”, “Last week, did you use a SNAP EBT card?”, and “Last week, did you receive food assistance from a charitable organization like a food pantry, free community meal, or some other free grocery program?”

As the following figure shows, when directly asked, the percent of respondents affirmatively answering these questions was 43%, 13%, and 7% respectively.  

 

The other groups of respondents were asked these questions in an indirect fashion.  In particular, we used an approach called a “list experiment”, which has been used in political polling for years.  The approach asks people to indicate HOW MANY of a list of items relate to the respondent (not which one).  This question is asked to a control group, and then a treatment group receives the exact same list plus one additional sensitive (or controversial) issue.  By comparing how many items the respondent indicates in the treatment relative to the control, one can back out the aggregate percent of respondents to whom the additional issue applies.  The essence of the approach is that people don’t have to actually tell you whether each issue corresponds to them, and thus it removes the potential for social desirability influencing respondents.

In the control group, respondents were asked, “Below are three activities; How many of the following things did you do last week?   Went to a movie, Ate spaghetti,  Bought toothpaste.” The treatment groups were the same except we added an additional fourth item, either “bought organic food”, “used a SNAP EBT card” or “Receive food assistance from a charitable organization like a food pantry, free community meal, or some other free grocery program?”   

As the figure shows, the degree of affirmation inferred from the indirect question was lower for all three issues, particularly for organic food.  The result suggests that respondents might face social pressure to indicate more support for organic food than they actually have, as the percent who said they purchased organic fell from 43% to just 11%.  However, the results related to SNAP and charitable assistance are opposite of what was expected in that one might expect respondents to under-report these activities when directly asked if in fact respondents were remiss to reveal such information.

Grist Review

Over at Grist.com, Nathanael Johnson reviews my forthcoming book, Unnaturally Delicious, alongside another new book by Simran Sethi Bread Wine Chocolate: The Slow Loss of The Food We Love.  I like how he contrasts the competing visions about the future of food that Sethi and I offer.

I was pleased to see that Johnson got one of my take-home messages:

“Lusk, for his part, is right in pointing out that our food system keeps improving. The food system may be broken, but it’s always been broken and it’s better now than any time in the past.”

Here's how Johnson wraps up his reviews: 

“I think there’s a way to reconcile these two perspectives. The progress that Lusk celebrates has given much of humanity the comfort and wealth to demand the diversity Sethi yearns for. In fact, Sethi’s book is full of evidence that there’s already a renaissance in diversity underway. She makes her way through a 10-acre vineyard growing rare grapes, visits with the makers of artisan chocolates ($6 a bar — even $18 a bar), and drops in on craft brewers reveling in the ever-growing market for unique flavors.

Every renaissance scuffles with stability and tradition. When Sethi asks one custodian of grape diversity why we don’t see vintners growing different types of vines, he tells her, “Everyone wants to drink a 300-year-old French variety with a 300-year-old history, but it’s impossible for a modern wine grape breeder to create a brand-new 300-year-old variety.”

It seems to me that the way to a more diverse, equitable, and delicious food system doesn’t wind back into traditionalism but leads us forward into the unknown. That’s a little scary. But, like many scary things, it’s also tremendously exciting.”

100 year old fat tax

Thanks to David Allison and his colleagues' weekly email summarizing the latest research on obesity, I ran across this policy proposal in the British Medical Journal from 1904.  If you can't read the fine print, it says, in part, "A superfluity of fat, which is mostly the result of luxurious living, may therefore not unfairly be regarding as a fitting object of taxation."  You're off the hook if you weigh less than 135 lbs.