The distributional impact of fiscal policies to promote healthier and sustainable diets in low- and middle-income countries
Unhealthy diet and obesity are major risk factors for non-communicable diseases, leading to high treatment costs, productivity, and welfare losses, representing a threat to socio-economic development. There is increased interest in consumption taxes to promote healthier diets, with a growing body of evidence supporting their effectiveness. Such taxes may also represent a policy option to promote climate-friendly diets and reduce the significant anthropogenic greenhouse gas emissions associated with agriculture and food production. However, the financial impact of consumption taxes on the poorest is of significant concern.
While these taxes are likely to appear regressive when considering only the potential increase in spending to buy taxed products, low-income consumers may experience disproportionate health benefits. Although these potential health gains also translate into financial benefits, this has not yet been quantified in the literature.
I believe that it is the role of economics to ensure that preventive health policies improve welfare and its distribution across social groups. I aim to investigate the distributional impact of fiscal policies to promote healthier and sustainable diets in low- and middle-income countries, particularly in Latin America, where obesity is pervasive. I will model the impact of different types of fiscal policies on food expenditures and the welfare benefits derived from potential diet improvements per income group, in terms of reduction in out-of-pocket expenditures to treat diseases related to overweight and unhealthy diet and increased lifetime labour incomes derived from reduced premature mortality.
1-Health Practices, Innovation & Implementation