In the January issue of Cato Unbound, Christopher Snowdon reviews the efficacy and fairness of sin taxes aimed at preventing obesity. He finds that at low levels of taxation, consumers don’t change their behavior appreciably, and when they do abandon the taxed foods, it will often be in favor of other high-calorie choices. Very high levels of taxation may be needed to bring about significant public health benefits, but here the evidence is sparse, because few jurisdictions have tried taxation at these levels. Moreover, all such sin taxes are regressive; they hurt the poor disproportionately and become justly politically unpopular. Snowdon concludes that sin taxes aimed at obesity are an ineffective public policy tool, even on their proponents’ own terms.
Obesity remains a serious health problem and it is no secret that many people want to lose weight. Behavioral economists typically argue that “nudges” help individuals with various decision-making flaws to live longer, healthier, and better lives.
In an article in the new issue of Regulation, Michael L. Marlow discusses how nudging by government differs from nudging by markets, and explains why market nudging is the more promising avenue for helping citizens to lose weight.
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