Assessing the Potential Effectiveness of Food and Beverage Taxes and Subsidies for Improving Public Health

In an effort to decrease obesity and improve health outcomes, taxes and subsidies are considered ways to incentivize consumers to improve food consumption patterns. This article is a systematic review of recent U.S. studies on price elasticity of demand for sugar-sweetened beverages (SSBs), fast food, and fruits and vegetables. Additionally, this review examines the direct association of prices/taxes with body weight outcomes.

Reviewing studies published between January 2007 and March 2012, a total of 21 studies were included as part of the review of the effect of prices on consumption, and 20 studies were included as part of the review on body weight outcomes.  In addition to other criteria, studies included must use U.S. data.

Key Findings:

  • The price elasticity of demand for SSBs was -1.21; fast food, -0.52; fruits, -0.49; and vegetables, -0.48.
  • Studies linking soda taxes to weight outcomes showed minimal impacts on weight. This, however, is based on existing state-level sales taxes that are relatively low.
  • Lower fruit and vegetable prices were found to be associated with lower body weight outcomes among low-income children and adults.

This review indicates that changes in the relative prices of less healthy and healthier foods and beverages can impact consumption and weight outcomes.