Junk-food Taxes vs. Healthy-food Subsidies

So here's a question: Which of the two things in this post's title do you figure will improve the nutritional quality of the groceries an average American might buy at the grocery store? Basically it amounts to a contest between making bad-for-you food more expensive and making healthy food less expensive.

According to a new study in the journal Psychological Science, the taxes win out over the subsidies. (H/T Tom Laskawy at Grist for pointing us to the article about it at Science Daily.) A group of psychological scientists led by Leonard Epstein of University of Buffalo asked volunteers, all of them mothers, to "shop" at a fake a grocery store for food ranging from fruit and veggies to soda and chips, which was posted with nutritional information.

The first time the volunteers shopped, the food was priced as usual at a grocery store, but the next few times, the scientists priced the food in keeping with either taxes or subsidies. For the "tax" scenario, they raised the prices of unhealthy foods by 12.5 percent, and in the "subsidy" scenario, they lowered prices on healthy foods by 25 percent.

The results? The mothers purchased healthier foods when the junk food was taxed than when the healthy food was subsidized. As Science Daily puts it, "taxing unhealthy foods reduced overall calories purchased, while cutting the proportion of fat and carbohydrates and upping the proportion of protein in a typical week's groceries." Not too shabby a result.

On the other hand, not only did subsidizing healthy food not inspire a healthier grocery haul, it actually resulted in the mothers purchasing more calories without increasing the nutritional value of their total purchase.

So, people will certainly buy more healthy food when it's cheaper, but that won't stop them from also buying the unhealthy food to go along with it. Unless, that is, that food goes up in price. Let's face it; people like their soda and their chips and their snack cakes.

What's a health-concerned nation to do? We want to get healthy but a whole lot of people hate the idea of more taxes on food, especially "sin taxes" that feel like the invisible hand of their mother. I've got an idea: How about we start by eliminating the subsidies on corn and soy that are keeping all those unhealthy foods artificially cheap in the first place?

Photo: Mike Licht, NotionsCapital.com