Equity impacts of price policies to promote healthy behaviours

Franco Sassi*, Annalisa Belloni, Andrew J. Mirelman, Marc Suhrcke, Alastair Thomas, Nisreen Salti, Sukumar Vellakkal, Chonlathan Visaruthvong, Barry M. Popkin, Rachel Nugent

*Corresponding author for this work

    Research output: Contribution to journalReview articlepeer-review

    54 Citations (Scopus)

    Abstract

    Governments can use fiscal policies to regulate the prices and consumption of potentially unhealthy products. However, policies aimed at reducing consumption by increasing prices, for example by taxation, might impose an unfair financial burden on low-income households. We used data from household expenditure surveys to estimate patterns of expenditure on potentially unhealthy products by socioeconomic status, with a primary focus on low-income and middle-income countries. Price policies affect the consumption and expenditure of a larger number of high-income households than low-income households, and any resulting price increases tend to be financed disproportionately by high-income households. As a share of all household consumption, however, price increases are often a larger financial burden for low-income households than for high-income households, most consistently in the case of tobacco, depending on how much consumption decreases in response to increased prices. Large health benefits often accrue to individual low-income consumers because of their strong response to price changes. The potentially larger financial burden on low-income households created by taxation could be mitigated by a pro-poor use of the generated tax revenues.

    Original languageEnglish
    Pages (from-to)2059-2070
    Number of pages12
    JournalThe Lancet
    Volume391
    Issue number10134
    DOIs
    Publication statusPublished - 19 May 2018

    Bibliographical note

    Funding Information:
    NS reports a grant from International Development Research Centre, during the conduct of the study. RN reports grants from Bloomberg Philanthropies and from Cancer Research UK, outside the submitted work. The opinions expressed and arguments used in this paper are solely those of the authors and do not necessarily reflect the official views of the OECD or its member countries.

    Publisher Copyright:
    © 2018 Elsevier Ltd

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