Abstract
Food taxes and subsidies are one intervention to address poor diets. Price elasticity (PE) matrices are commonly used to model the change in food purchasing. Usually a PE matrix is generated in one setting then applied to another setting with differing starting consumptions and prices of foods. This violates econometric assumptions resulting in likely mis-estimation of total food consumption. In this paper we demonstrate this problem, canvass possible options for rescaling all consumption after applying a PE matrix, and illustrate the use of a total food expenditure elasticity (TFEe; the expenditure elasticity for all food combined given the policy-induced change in the total price of food). We use case studies of: NZ$2 per 100g saturated fat (SAFA) tax, NZ$0.4 per 100g sugar tax, and a 20% fruit and vegetable (F&V) subsidy. We estimated changes in food purchasing using a NZ PE matrix applied conventionally, and then with TFEe adjustment. Impacts were quantified for pre- to post-policy changes in total food expenditure and health adjusted life years (HALYs) for the total NZ population alive in 2011 over the rest of their lifetime using a multistate lifetable model. Two NZ studies gave TFEe's of 0.68 and 0.83, with international estimates ranging from 0.46 to 0.90 (except a UK outlier of 0.04). Without TFEe adjustment, total food expenditure decreased with the tax policies and increased with the F&V subsidy-implausible directions of shift given economic theory and the external TFEe estimates. After TFEe adjustment, HALY gains reduced by a third to a half for the two taxes and reversed from an apparent health loss to a health gain for the F&V subsidy. With TFEe adjustment, HALY gains (in 1000's) were: 1,805 (95% uncertainty interval 1,337 to 2,340) for the SAFA tax; 1,671 (1,220 to 2,269) for the sugar tax; and 953 (453 to 1,308) for the F&V subsidy. If PE matrices are applied in settings beyond where they were derived, additional scaling is likely required. We suggest that the TFEe is a useful scalar, but we also encourage other researchers to examine this issue and propose alternative options.
Highlights
Nutrition policy to prevent or mitigate the obesity epidemic, and improve diets, is a major policy issue.[1]
All-cause mortality and morbidity data, and disease specific incidence, case fatality and prevalence rates, are all provided in an Excel file “Disease Inputs used for Multi-State Life Table Modelling (Version 1.0)” available at the BODE3 publications webpage: https://www.otago. ac.nz/wellington/departments/publichealth/ research/bode3/publications/index.html
We suggest that the total food expenditure elasticity (TFEe) is a useful scalar, but we encourage other researchers to examine this issue and propose alternative options
Summary
Nutrition policy to prevent or mitigate the obesity epidemic, and improve diets, is a major policy issue.[1]. To estimate the health impacts, including the relative health impacts across multiple policy options, modelling is useful.[18] A key–and challenging–aspect of this modelling is parameterizing how total diets change with food taxes and subsidies. Price elasticities (PEs) are commonly used to convert a food tax/subsidy intervention to a change in total diet [19] which is linked to changes in BMI and other risk factors, disease rates, and to morbidity and mortality. A PE matrix is generated in one setting applied to another setting with differing starting consumptions and prices of foods. This violates econometric assumptions resulting in likely mis-estimation of total food consumption. We use case studies of: NZ$2 per 100g saturated fat (SAFA) tax, NZ$0.4 per 100g sugar tax, and a 20% fruit and vegetable (F&V) subsidy
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