Stories | April 9, 2010

Food for thought

Do tax hikes on unhealthy foods work?

An experiment to test if people cut back on high calorie foods if the foods cost more has produced findings that are truly food for thought.

The research - published in Psychological Science and Psychology Today's Ulterior Motives blog - found shoppers did buy less unhealthy foods when the items were subject to higher tax.
But there was a twist. When a subsidy for healthy food was introduced, it "backfired".
"When the price of healthy foods was decreased, mothers actually bought about the same amount of healthy food as they did without a price change, and then spent the savings on unhealthy foods," wrote Art Markman in his Psychology Today blog.

Needs or wants?
In addition to a lesson for policymakers, as Markman suggested, the test may also carry a personal finance message. It suggests stores could influence some shoppers' choices (and their total spend) by adjusting the prices of certain products. It could pay to keep focussed on what you specifically need or want when shopping - and think carefully about stocking up on an item you may not need just because it is discounted. 

eZonomics team
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