Fat Tax Will Encourage Low Fat Food Choices

December 28, 2015 Taxation in USA

Five Guys MealWASHINGTON D.C. – New research indicates that a small tax on the fat content of foot may actually encourage consumers to purchase low-fat foods.

The results of a new study completed by researchers from the Northwestern University, the University of Michigan, and the New York University Stern School of Business, have indicated that a tax on the fat content on food may have a strong effect on consumers choices.

The study revolved around monitoring consumer spending habits when buying milk at supermarkets which charged the same price for full fat and skim milk, against spending for milk in super markets which charged a premium for full fat milk.

It was found that in supermarkets where all milks were priced equally, full fat milk was the preferred option, especially in low income areas.

However, in areas where full fat milk was priced at a premium, lower fat options were more popular.

The researchers indicated that the shift in preferences to lower fat option occurred even at low prices, with people shifting to the lower price options at USD 0.15 per gallon.

The results of the research should mirror the effect of a potential tax on the fat content of food, and any such measure could prove to be effective at encouraging consumers to buy low fat foods.

Photo by Ramen Junkie