As part of a PBS Roundtable discussion on obesity, I was asked about my thoughts on “junk food taxes.” In this brief clip, I describe that there are many determinants, or factors, that go into our behaviors and choices. One of the key factors is cost. All else being equal, when something costs a relatively large amount, there is a lesser chance that we’ll spend our money on it; if it becomes cheaper, there is a greater likelihood that we’ll purchase it. This is “Economics 101.”
The problem is that food costs have become skewed. In general, the unhealthful foods – sodas, chips, candy, and most packaged/processed foods – cost far less than healthful foods, such as fruits, vegetables, lean meats, fish, and so forth. Thus, there is an incentive to purchase and eat the unhealthful foods. There are numerous reasons for this disconnect: existing price, taxation, and subsidy structures are often backwards; processed foods can be made, packaged and distributed in much greater amounts than perishable foods, leading to economies of scale that decrease cost; and others.
As a result, we should consider options that better align food costs with healthy decisions. One option is a small excise tax on sweetened beverages and other “empty calorie” foods, with the money raised going toward subsidies and other mechanisms to make healthful foods somewhat more affordable – particularly for the most unfortunate in our society.