An interesting new study was just published in Psychological Science, about a lab experiment at SUNY Buffalo that suggests junk-food taxes increase the overall nutritional quality of a shopping trip, while subsidies on healthy foods actually decrease the nutritionally quality (via Science Daily).
[Study author and clinical psychologist Dr. Leonard] Epstein and colleagues simulated a grocery store, "stocked" with images of everything from bananas and whole wheat bread to Dr. Pepper and nachos. A group of volunteers -- all mothers -- were given laboratory "money" to shop for a week's groceries for the family. Each food item was priced the same as groceries at a real grocery nearby, and each food came with basic nutritional information.
The mother-volunteers went shopping several times in the simulated grocery. First they shopped with the regular prices, but afterward the researchers imposed either taxes or subsidies on the foods. That is, they either raised the prices of unhealthy foods by 12.5 percent, and then by 25 percent; or they discounted the price of healthy foods comparably. Then they watched what the mothers purchased.
The study authors separated food into two categories, "high calorie for nutrient" food and "low calorie for nutrient" food -- i.e. junk food and healthy food. They did this so that they could specifically measure the effect pricing changes had on the nutritional content of a participant's shopping basket. As you might expect, taxing junk food reduced junk food purchases, and subsidizing healthy food increased healthy food purchases. But the story does not end there. The researchers discovered that taxing the bad stuff was far more effective from a nutritional standpoint than subsidizing the good stuff -- and not just because prices affected sales.
The junk food taxes caused a real shift in nutritional quality because the money saved on junk food was spent on healthy food, which has more nutrients per calories. However, when the researchers subsidized healthy food in their test, many participants spent the savings on -- wait for it -- junk food. A subsidy for health foods actually increased the amount of fat, protein, and carbohydrates from that simulated shopping trip by about 10 percent each.