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Equity Impacts of Price Policies to Promote Healthy Behaviours

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JournalThe Lancet
DateAccepted/In press - Feb 2018
DateE-pub ahead of print - 5 Apr 2018
DatePublished (current) - 19 May 2018
Issue number10134
Volume391
Number of pages12
Pages (from-to)37-48
Early online date5/04/18
Original languageEnglish

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.

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© 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.

    Research areas

  • Sugar tax, Equity, fiscal policy, inequality, TAX

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