Here is a very interesting article by Patrick Basham and John Luic, providing a very thoughtful and well-researched piece arguing why fat taxes don’t work. Their conclusion, surprise surprise is that the answer is a simple economic one – demand for food tends to be largely insensitive to price and that there is considerable research on food prices that has demonstrated this inelasticity…
“The latest economic research strongly suggests that a fat tax may simply prove to be a futile instrument in influencing the behaviour and habits of the overweight and the obese. Those consumers ‘addicted’ (to use the obesity crusaders’ term) to unhealthy food will not be dissuaded from their eating habits and patterns by a tax. Those consumers who strongly prefer ‘unhealthy’ foods – those we term dietary ‘risk takers’ – continue to eat and drink according to their individual preferences until such time as it becomes prohibitively expensive to do so..”
It’s a must read. Here’s hoping that someone puts a copy into David Cameron’s in-tray.