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.
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 language | English |
|---|---|
| Pages (from-to) | 37-48 |
| Number of pages | 12 |
| Journal | The Lancet |
| Volume | 391 |
| Issue number | 10134 |
| Early online date | 5 Apr 2018 |
| DOIs | |
| Publication status | Published - 19 May 2018 |
Bibliographical note
© 2018 Elsevier Ltd. All rights reserved. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy.Keywords
- Sugar tax
- Equity
- fiscal policy
- inequality
- TAX