Nutrition related disease is a major threat to health worldwide. The incidence of myriad diseases is rising with growing consumption low quality food.
According to theory of supply and demand unhealthy food consumption should be amenable to taxation. Consequently, governments worldwide are considering and implementing food taxation policies aimed at health promotion. But can food tax work in practice?
This paper systematically reviews the successes of tax in Denmark and potential of nutrition taxation in the UK in its various forms. Although focussed on Denmark and the UK the results are applicable to most developed economies.
824 titles were searched, 19 found to be relevant. These were subsequently reviewed on the basis of specificity and validity of methodology for food taxation in developed countries.
The results of the paper describe price elasticity of demand for food to be relatively inelastic. However due to the far reaching effect of taxes over populations this small change in individual consumption can have large health impacts. Furthermore, food tax revenue retrieval was publicly deemed acceptable.
Owing to the economic focus of this paper, the impact of assumptions on results could be profound. Moreover, the resources in the literature are few. However, as food tax use increases, the potential for inappropriate administration to increase mortality necessitates review.
To conclude, tax holds potential to improve public health developed countries whilst being politically and economically viable. However, careful application is indicated as substitution effects can be deleterious for health.
