SIO392: How Taxes on Foods Affect Health and Climate

Transcript

This transcript was generated automatically and may contain errors — the audio is the record.

0:00:16 Thomas: Hello and welcome to Serious Inquiries Only. This is episode 392. I'm your host, Thomas Smith, and I'm excited for today's show. Got a really interesting science thingy about how tax policy can influence people's decisions on buying and consuming food, something that I think is probably a thing we ought to be doing in this country because, feel like there are big problems with our diets and the kinds of foods that that are cheapest and easiest to get in this country. But more on that with our expert in a moment. Before that, I've got some cool stuff. I know I've probably already said this in different places, but just a reminder on some fun Patreon-related things. So, first off, we are scheduled for Seriously Awful Movies number three, which will be Good Will Hunting, and we're having Dr.

0:01:02 Thomas: Stormy Decisus on to help us break that down. And Omar is returning such a Sam's as Armageddon. Omar's so funny. I cannot wait. I'm really looking forward to that recording and that'll be the bonus for this month. So patreon.com/seriouspod for that. And also we are starting our monthly hang for our top patrons. I'm glad that now with Lydia on board full time, are so many things that we're going to be accomplishing that I just didn't have the bandwidth to accomplish before.

I wanted to do lots of ideas I had, but, you know, didn't have that wherewithal. Well, Lydia's got the wherewithall. She's brought a ton of wherewithals with her. She wears wherewithalls. That's the, that's actually the dress code of the company. Anyway, hang outs. And these are going to be Zoom hangs. We're going to, you Know, so it's all of us on a Zoom hangout. It's going to Be super fun. The details are in the Patreon.

Once again, patreon.com/seriouspod It's available to the third tier and up patrons of either show. So SIO and WTW, we're combining that and doing one hangout with everybody. And we'll answer questions. We'll give behind the scenes stuff. Research that we haven't gotten to talk about. Maybe stuff from WTDub that didn't make the main show. Maybe our plans for future stuff. All kinds of stuff to talk about. And for TopTopTop patrons, we're going play some games afterwards. We've already gotten some signups there.

So check out the Patreon if you'd like to sign up, and I'm excited for some code names with friends, and that is October 26th at 3 p.m. Pacific, that's 6 p.m. Eastern, and then that'll be an hour, and then the games to follow, so the games will be at 4. Can't wait, super excited. Jump on the Patreon while you're there, you'll enjoy ad-free shows each and every episode, no stupid ads. Isn't that the best

0:02:36 Thomas: Who have pledged. Again, Lydia quitting her job and working full-time with the company is a scary thing. It's a very scary thing, and we really appreciate anyone who helps us be less scared by pledging to Patreon on any of the shows. All right, and now to today's science thingy. We're going to be joined by Dr. Wisdom Dogbe, inarguably the coolest name of any scientist I've had on here. And Dr. Dogby is going to tell us about a study involving tax policy and incentives for and disincentives, I guess, that took place in Scotland, by the way, to nudge people toward different foods and different food choices, and specifically what impact that has on climate, which is sort of a different question than maybe typically might have have looked at with this. Because normally, you know, health is the focus.

0:03:21 Thomas: And Dr. Dogbe and others in the research wanted to look at specifically the climate impacts of that. And so let's get Dr. Dogbe on the phone here. That's not a phone. No, it's actually, it's a rotary phone. And I put the mic up to the speaker and the speaker on the mic. And that's how I do interviews. That is how I do it. So let's make that happen. Here we go. Dr. Dogbe, thanks so much for joining me today.

0:03:46 Wisdom: Thank you for having me.

0:03:48 Thomas: I hear you're a little new to podcasts.

0:03:51 Wisdom: Yes, it's actually my first time.

0:03:54 Thomas: I'm excited to be your first podcast interview. Yeah, it's an honor for me. I appreciate you coming on.

0:03:59 Wisdom: That's great. I hope to continue joining you in the future. Yeah.

0:04:02 Thomas: Yeah. Hey, they are a great source of information these days. Lot of people a get lot of information through this. I'm excited to talk about this study that recently came out. It's called Could Taxes on Foods High in Fat, Sugar and Salt, which is abbreviated HFSS, Improve Climate Health and Nutrition in Scotland, which is obviously a mouthful, but pretty much tells you what you need to know about the study. But before we get into that, I'm always interested, if you don't mind, in a little bit of like background and how you got into this area and, you know, a little bit of your like academic journey,

0:04:12 Wisdom: Yeah, My name is Wisdom Dogbe, so I hold a PhD in Agricultural Economics. I work in Scotland for the University of Aberdeen, and I think I've been doing this research for almost uh seven years now, so Most of my research work are based on understanding consumer behavior, why consumers buy what they buy and what encourages them to buy what they've been buying, and how we can also improve nutrition for consumers by nudging them, so either giving them subsidies or taxes, or also how retail promotions encourages consumers to buy more of their products that you put in store. Yeah, so basically that's Summary of what I do.

0:04:49 Thomas: Wow.

0:05:20 Thomas: Sure. Yeah. Is there something in your life or anything in particular that led you to want to pursue that? Or is it just kind of chance where you ended up?

0:05:20 Wisdom: Yeah.

0:05:29 Wisdom: Would say I loved to understand how human behaves, so going into agricultural economics, I was always interested in understanding how consumers behave and why we eat what we eat. So that's what actually pushed me to go into this area of research.

0:05:50 Thomas: Yeah, super interesting. It pretty interdisciplinary? You know, it sounds like there's a lot of different areas involved in those questions. You know there's not just the the economics, but there's also, you know, nutrition, science, all things. Is that the case, you think? It's very interdisciplinary.

0:06:05 Wisdom: Yeah. Basically, most of the things we do agriculture, consumer behavior, nutrition, climate, Health. Health, so we, we try as much as possible to put all this under one umbrella to be able to understand our world today and to see how we can improve our food consumption behavior.

0:06:12 Thomas: Right. Climate, yeah.

0:06:26 Thomas: All right. Well, that said, why don't you take us through kind of the goals of the study and set it up for us?

0:06:32 Wisdom: So uh this research is basically about understanding uh how government can improve climate health by taxing foods high in fat, sugar and salt. So basically, what we did was to sample about 3,000 households from Scotland, then if a tax on foods high in fat, sugar and salt could help them reduce their consumption, which will also lead to an improvement in climate. So if consumers decide to reduce their consumption because there is a tax on these types of food, then it means that the reduction can translate into a reduction in carbon emission. So we Use the data, we applied a model. I wouldn't go into the model, so We

0:07:23 Thomas: Yeah, I read the study. It seems like there's an awful lot of that. We don't have to get into too many of those details. Details.

0:07:25 Wisdom: Yeah. So Okay. That's right, so we simulated uh two types of taxes where we decide to tax these types of food, foods that are high in fat, sugar and salt, without subsidizing any of the food that a consumer buys. Then the second option is to tax the consumer, okay, then subsidize uh food and vegetables to see if their consumption behavior is going to change, and if that changes, how does it affect their nutrient intake, and also how does that also affect their uh emission.

0:08:03 Thomas: Yeah. Well, let me pause you there because there's so much to get into already before we, you know, reveal kind of the results that you got. First off, there's a lot of interesting research cited, of course, your in research. And can you talk at all about the history of just the concept of pushing consumer behavior like this through taxes? I mean, mean, has this been successful? I know in America, you know, I think in New York, there was, you know, the governor wanted to tax soda to get people to drink that less. You know, there's these different things. I'm sure that's all something that you've looked into because of this. Can you give us an indication of, now, has that worked or not worked just as a concept in general before?

0:08:05 Wisdom: Yeah.

0:08:43 Wisdom: So uh there have been a lot of studies on the impact of taxes on consumer behavior. There have been studies in Africa, studies in Europe, the US, and I know also in Australia. In conclusion, most of these studies conclude that taxing consumers actually pushes them to reduce their purchases. For instance, there was a tax in Denmark, which is the first fat tax, and the tax actually led to a reduction in consumption of saturated fats. So yeah, also in the U.S. and in Mexico, in Mexico actually the sugar tax in Mexico has had a phenomenal impact on body weight in Mexico, according to the studies that we reviewed, which shows that taxes are having like effects on consumers. And also in the UK, actually we had the soft drinks levy, which had a huge impact on the purchases of soft drinks in the UK. So taxing consumer, most policy makers do not want to do that because it is something that uh nobody likes, but

0:09:52 Thomas: Yeah, not good for elections probably, right?

0:09:54 Wisdom: Yes, yeah, a politician hates to impose taxes on consumers, yeah. Because of that, but in effect, they have been very effective, they've been very effective. That we've reviewed over 90 studies across the world, and all. All of them point to the fact that taxing consumers actually do have an effect on their consumption. We believe in, taxes do have positive effect on consumers.

0:09:59 Thomas: Yeah. Wow.

0:10:20 Thomas: Assuming they're, you know, being used correctly. Yeah. Now I've seen people say that, you know, this seems unfair, why can't we tax the corporations that are making the stuff? Is that anything you've looked at? Feel I like from an an economics perspective, it maybe ends up being the same anyway, because they just pass on the price to the consumers anyway. Is there any play in the joints? Is there anything to do differently there? Or is it pretty much always approached as we're just taxing, you the point of sale kind of thing?

0:10:46 Wisdom: I think what happens is that when you tax or retailers, what happens is that they tend to pick up some amount of the taxes and pass on just a portion of the tax to consumers, so the impact on consumers is always little compared to when you tax the consumer themselves. Okay, so assuming that there is a tax of one dollar on, let's say, on high fat food, if the tax is imposed on the manufacturer, they are likely to just pass on about 60% of the tax on the food product for the consumer to pay, then they absorb the rest because they want to maintain their market shares. Okay, but where the taxes imposed directly on the consumer, or there is a floor price where, where the consumer has to pay that amount of price, then it means that the tax, the 100% of the tax is transferred to the consumer and the effect is greater on consumption.

0:11:52 Thomas: Oh, okay. So I mean, I guess, effectively, you could tax the companies to get the effect if you did it more. But I guess if you're trying to just influence behavior, then then it's kind of indirect, but I suppose, you know, it's, I guess you could still do it that way. Now that I think about it, if you, then, then you result in more tax revenue and maybe that behavioral change.

0:11:58 Wisdom: Yeah. Yeah. Yeah. You could tax manufacturers, but the impact will be little compared to if you tax consumers directly. Yeah.

0:12:20 Thomas: Yeah. Yeah, yeah, I know that on my show and just on the internet in general, a lot of these areas are pretty fraught. And so, so like a lot of the opinions on food and, you know, obesity and health and all that, it does seem like there's just, there's a lot of people with a lot of very strong, you and stuff on this. And so I'm kind of curious, I don't want to wade into that too much, but it does feel like there is a lot of maybe value judgments that went into how you're choosing the foods you're choosing in particular, particular. So why, why high in fats, sugar, and salt? I, I know the sugar seems to make sense to me, but I wasn't under the impression that a high, that high fat foods were actually unhealthy. I, it's hard to know, it feels like it's impossible to have good information on this, it seems like there's so much out there, but is is that the current understanding of the a science, or how are these decisions kind of made?

0:13:06 Wisdom: Yeah. Yeah. Unfortunately, foods that are high in fat are also health damaging. Okay, so if you take too much fat, are likely to expose yourself to coronary heart diseases. Okay, so in terms of fats, there are different types of fat, we have unsaturated fat, we have saturated fat and poly saturated fat. Unsaturate and polysaturated fats are healthy fats which are good in diet, but unfortunately most of the fat we find in these types of foods are saturated fats, which are not good for the health, yes. Yeah. And

0:13:31 Thomas: Oh, okay. Gotcha. So it's so specifically saturated fats more that are the problem. Gotcha, yeah.

0:13:52 Wisdom: Yes. Yes. And also salt is also, uh, too much consumption of salt is not good, it predispose consumers to hypertension and all kinds of cardiovascular diseases. So, uh, I think most of the foods that we buy are preserved and the amount of salt in them are not in quantities that are good for Health, yeah. So we think that food that are high in these type of ingredients are not good for the consumer.

0:14:16 Thomas: Yeah, now is that something that is part of like your area or do you just kind of defer to like, okay the science in the field says this, says how's that process? I'm not an academic, so apologies. I don't know how this works exactly, but how, for your study specifically, like how were those decisions reached?

0:14:23 Wisdom: Yeah.

0:14:40 Wisdom: The food aggregates we have, actually based on what we have here in the UK. So the UK, we usually have different categories of food, okay? So we based on the content of fat, sugar, and salt in this product, that's how we categorize them, okay? So for instance, a lot of the biscuit that's available on the shelves have high amount of sugar, okay, even though they are good, the, the content of sugar is too high, I'm not sure about the situation in Australia, but I know that in the UK and most retailers label, so they put labels on their product to show the percentage of fat and sugar in the product, and if it is too much, you know, they normally put red, they put a red tag on it to tell you that the amount of sugar, uh, salt, or saturated fat is too high. So

0:15:01 Thomas: Hmm.

0:15:11 Thomas: Hmm. I wish the U.S. had that. We don't, we don't have that.

0:15:35 Wisdom: Okay, so we do have that here, so we use this at the benchmark to categorize this, the, uh, food that we have in our, yeah, studies.

0:15:46 Thomas: Well, not to get too sidetracked, but is the science good on, is that effective? Those red labels, have those been effective in changing behavior?

0:15:54 Wisdom: To be honest, personally yes, personally yes, when I go to the supermarket, I check, yeah, because I'm trying to check my weight, so I do check that. But it's difficult to say that for other consumers. I know there have been studies that tries to study behavior of consumers when they enter into the supermarket to see how and whether they read the labels or not. But I cannot speak about the conclusion of those studies yet.

0:15:57 Thomas: Yeah. Yeah. Yeah. Sure. Sure. Yeah. Yeah. I In America, we used, we to have not much on this, but then we started having, you total calories being shown on most things, so like fast food and all that stuff, and I, I know I heard at some point that it may have a counterintuitive effect if people try to max, max out their calories per dollar. So it was like, they're trying to make sure they were buying enough, you know, like it had a reverse effect, wasn't, but I'm, I not sure if that was like an actual overall conclusion, but remember there often can be like counterintuitive, you know? As I'm sure, you try to get people to do one thing and then they turn out to do another. And it's really hard to figure out how to, how to get them to do the thing that you want want them to do.

0:16:31 Wisdom: Yeah. Yeah. Yeah, that's true.

0:16:59 Thomas: So, I guess my next question is if in the study, it kind of goes through how this is, a result of some other studies that are specifically about, you health, more health-based outcomes and all that. And so I I get the connection from the health to these HFSS foods, but I guess what I'm wondering, and I could be a little biased here because I went vegetarian a few years ago for a lot of reasons, one of which being the climate. And I was wondering if choice of which foods to potentially to simulate the tax on, different choice would have made more sense if you were specifically trying to reduce carbon emissions? Or is it just that you wanted to use the food to see how those decisions would also impact climate change, though the decisions would be made for something else like health? Does that question make sense? Gotcha.

0:17:55 Wisdom: Yeah. Yeah, I totally understand. So Normally, most of the studies that tries to understand how we could reduce emission normally taxes and meat. So most of them focus on taxing meat or soft drinks. Okay. But what we thought was, well, there's been so much studies on meat and dairy product because we believe that cows produce a lot of, uh, how do you call it, methane that pollutes yeah, that pollutes the environment. So why don't we also look at the option that people are not looking at, but it's also health damaging. Okay, so that is what made us to focus on these foods that are high in fat, sugar, and salt. And also currently in the UK there is a lot of talks about, uh, trying to ban promotions on these types of food to see if consumers are going to reduce their consumption. So we thought, well, this is becoming an interesting area, so why don't we study the impact of taxes on these products. Okay, in

0:18:12 Thomas: Yeah.

0:18:25 Thomas: Methane, Yeah. Yeah.

0:19:04 Thomas: Okay.

0:19:04 Wisdom: The aspect of health, and also go further to look at if there will be any positive impacts on the climate. Yeah, yes.

0:19:13 Thomas: So it wasn't as though you were like, let's try to maximize that environmental impact. Because then I feel like, yeah, it would probably have led you to a different choice. It's sort of taking that all together and seeing, yeah. Okay, that makes sense. I was a little confused about that. Yeah. So on that topic, I know it's spelled out in the study, but just for our listeners, do you want to talk a little bit about like which foods are the most, impactful on the climate? Which foods are potentially the worst for climate change and which foods Are better? Because it wouldn't necessarily have to follow health. You know, it could be that the most unhealthy thing possible might be the best for the climate. And would be really interesting to have to make that decision.

0:19:47 Wisdom: Yeah. Yeah, so in terms of climate, uh, meats and dairy products, the meat, fish, and dairy products, they are the food product with the highest carbon footprint, so they are very, very health damaging, then followed by ready-to-eat meals. You know, these ready to eat meals, most of them are meat and fish based.

0:20:13 Thomas: Sure. Like microwave meals, kind of. Ah, gotcha. Yeah.

0:20:17 Wisdom: Yeah. So most of these products contain either cheese, meat, or fish. And And these ingredients in the food makes them to have very high carbon footprint. Surprisingly, alcoholic beverages has one of the lowest carbon footprint, yeah.

0:20:34 Thomas: Oh, thank God. All right. I'm happy about that news.

0:20:38 Wisdom: In terms of the foods that are high in fat, sugar, and salt, cake pastries normally have the highest carbon footprint than take-home sugary drinks. Have the lowest carbon footprint.

0:20:51 Thomas: Sorry. Take home sugary drinks. Is that what you said? Ah, there you go.

0:20:53 Wisdom: Yeah, sugar drinks, yes. They yeah. They have the newest carbon footprint, which is quite surprising.

0:20:55 Thomas: Yeah. Yeah. Yeah. And it's one of those where they are quite unhealthy, right? So it's like, that's going to be one of those contrasts. Yeah.

0:21:05 Wisdom: Yeah? They have highest impact on health, but the lowest impact on the climate.

0:21:10 Thomas: Yeah. So what about, I know in the US and I have I no idea how much of this would be something you would know about, but I know that for us, for some reason, I think due to some sort of subsidy or tax or something, instead of sugar, everything is high fructose corn syrup. Is that something that is true in Scotland and the UK or not?

0:21:32 Wisdom: In the UK, I think most people still buy sugar. But I think what is happening now because of the soft drinks levy is that producers are trying to reduce the amount of sugar that they put in their food by using these natural sugars, these types of syrup to reduce, reduce the amount of calories that they have in their food, which I think is good. But you know, consumers still try to bypass all this by buying more of the products to get the amount of satisfaction that they want, you know.

0:21:45 Thomas: Yeah.

0:22:04 Thomas: Yeah, I guess that's what I was going to ask about when it comes to the tax. Is there a way, and maybe this isn't something your study worries about, maybe it's more about like leave it to the government to figure out how to implement it or something. But I just feel like that's a way that here have gamed the system potentially. It's just, all right, well, we're not going to use sugar. We'll use this high fructose corn syrup and then somehow, or maybe it'S just cheaper. I actually don't know. I haven't looked into that. But is there any way that this tax can get kind of sidestepped avoided? Or is it just because if you're taxing the products themselves at the final of, you know, kind point of sale, then doesn't really matter how they do it. As long as it's labeled high sugar, then it'll be it would it would potentially have the tax and they couldn't get around it.

0:22:48 Wisdom: I think in the UK, what happened when the soft drinks levy was announced, you the levy was imposed on different categories of soft drink. So those that are high in sugar, then those are those that have moderate amount of sugar, then those that have a lower amount of sugar did not attract any tax. So what producers decided to do was to reduce the amount of sugar. Okay, in the high, those products that have high amount of sugar, they kind of substitute the content of the sugar with, uh, these type of natural sugar budget Yeah.

0:23:00 Thomas: Oh, like fake sugar, like Splenda type stuff.

0:23:25 Wisdom: Yeah to move from the high category to the medium category so that they can avoid the taxes because if they get more taxes, it means that they are going to lose market shares. Okay. Which they don't want to do. So I think in the UK, what happened is most of the manufacturers, you know, reduce their sugar content in their product, which I think was good.

0:23:25 Thomas: Yeah. OK. Right. Mm-hmm. Yeah.

0:23:51 Wisdom: Yeah. But, the consumer can also still buy, if they are buying one liter of, uh, what do you call it, the product, they can buy two liters and the amount of sugar they are taking will exactly be the same as they were when they were buying one liter.

0:24:03 Thomas: Oh, is that?

0:24:04 Wisdom: Is a way to bypass, yeah.

0:24:04 Thomas: Oh, really? OK. Well, that's interesting because I've always I've I've the opposite. I've only thought regular soda is just too sweet anyway. Like if they just sold like a half sweet version, I feel like I would be into that. But I guess I don't know. Maybe I haven't tasted it. So I tend to just get diet stuff.

0:24:07 Wisdom: Yeah.

0:24:20 Wisdom: Yeah. Diet coke and all, all that around, yeah. But I think most people don't get addicted to sugar, Okay. So they don't fancy buying these products that have low amount of sugar. They still go for the high amount of sugar, yeah.

0:24:21 Thomas: Yeah, Mm hmm, and the replacement sugar doesn't doesn't do the trick for them. That's too bad. I wish the the scientists would get on that. Why can't we just have a fake sugar that's healthy and tastes good? That would solve a lot of these problems. I'll have to talk to a different scientist for that.

0:24:37 Wisdom: Yeah. Yeah. Yeah.

0:24:50 Thomas: So, okay, kind of all makes sense now. So the meat, yeah, that's the worst. So seems it like then, ideally, if we did want to fix the climate, it, it still makes sense that like, there are these foods that are, bad that and it's specifically meats and dairy and all that. Just wanted that to be said. But let's go to maybe more of the methods. I know a lot of this is some complicated math, but I know from my, you know, little bit of economics background in college and undergrad, you now, there's such a thing as elasticity of demand and there's going to be certain things where the price affects it a lot. You know, if you if you have a lot of elasticity, then, know, the the price doesn't it'll affect it, you know, so I can say, oh, I don't want to buy that today because it's a dollar more or something. And if you Have inelastic demand, then it's like, well, I have to buy its food.

0:25:35 Thomas: So I got to buy this no matter what or it's gasoline. So it's going to be really hard for my car or whatever. Would you say petrol? Maybe I don't to to fill your car something where it's Like, well you got to do it. It doesn't Really matter how much it costs. I mean, eventually I guess it would, you'd get priced out of it, but that's gotta be part of the calculation here, right?

0:25:53 Wisdom: The first step is to estimate the price elasticities, which actually show how sensitive consumers are to price changes in these products. Okay, so we estimated price elasticities for about, let me say, 19 different products. And surprisingly, foods that are high in fat, sugar, and salt are kind of inelastic, which means that consumers are not responsive enough to price changes in these product. So even if the price should go up, consumers, consumers will still buy the same amount of product that they were buying. They don't really care about about the price increase. So that is something that is very interesting that we found. The only product among these that are a little bit elastic were take-home savories and take-home confectionery. They had elasticity that is above one, but not really high. So in effect, among these products, consumers are not really sensitive to price changes. So even if government should increase the price by a big amount, a big margin, consumers will still go ahead and buy the same amount that

0:26:17 Thomas: Hmm. Really interesting.

0:27:05 Thomas: Yeah.

0:27:05 Wisdom: They were buying. Yeah, which is quite sad. Uh, unfortunately, so

0:27:09 Thomas: Yeah. Can you give us an example of these foods? I'm trying to think just, just to, to visualize.

0:27:14 Wisdom: Biscuits are inelastic, so we found elasticity to be negative 0.79, so consumers are not quite reactive to price changes in this product. We also have cakes and pastries, it has elasticity of 0.98, which is below one, which means that consumers are also not reactive to price changes in this product. We have total patterns and desserts, then we have take-home sugary drinks, we have ice cream. Ice cream has the lowest price elasticity, so the elasticity is about 0.6, which is extremely low, so it will require a huge amount of tax to change consumers' behavior in terms of purchasing of this particular product.

0:27:46 Thomas: Yeah. Yeah. Yeah. Ice cream's pretty, I do love ice cream. That's pretty Inelactic. So I mean, is is part of the problem, I know this is kind of part of the calculation, but is it just that the amounts we're talking about aren't really enough to make a difference? Um, anyway, I mean, is like, it because obviously if you get high enough on anything people just can't buy it, but is it relative to like the percentage of the current price that you're measuring, that elasticity kind of thing is like a percentage increase thing?

0:28:04 Wisdom: Yeah.

0:28:27 Wisdom: So elasticity, we are looking at the percentage change in price, if the percentage change quantity, if the price you just increase by 1%, okay, so if there is a 1% increase in price for ice cream, then you expect that quantity is going to reduce by just 0.5 percent, which is very, very low, quite extremely low. So it means that, well, to have a big impact, so if the government decides to increase the price of ice cream currently, the price that consumers are paying by 100 percent, then quantity bought will reduce by 57 percent, yeah.

0:28:51 Thomas: Yeah. Oh.

0:29:08 Wisdom: So you will require a hundred percent price increase to have a 50 percent quantity reduction. You And no government and no policymaker is going going to do that because

0:29:07 Thomas: Okay, so I imagine they would want to put the tax in in more like, uh, well, I'd say dollar terms, but whatever, pound terms, whatever, then percentage, because that would sound scary. I imagine that graph has got to be, that's not a straight line, right? Because I mean there's, you raise something by a couple pence or whatever, but like nobody would even notice. I feel like for us, you raise something by a couple cents, it feels like there would be almost zero impact. But then you get, it's like there's probably like a threshold amount where people start noticing the price. And then, you know, is that curve? Is that not something you really worry about in these calculations?

0:29:21 Wisdom: Yeah. Yeah.

0:29:51 Wisdom: In this calculation, uh, what we also take into account is the relationship, the between the different types of product that the consumer buys, okay. So we have about 19 different products, and uh, consumers are responsive to price changes, changes in the products that the tax is imposed, as well as the other products that they buy. Okay, so for instance, if there is a tax on biscuits, it doesn't only affect the purchases of biscuits, it also affects the purchases of beef, it affects the purchase of food and vegetables, it affects, uh, the purchases, uh, and fats, so it affects almost everything, because uh, when the consumer goes to shop, they look at the prices of other products that are available, and they decide to choose among these 19 products what to buy. Okay, so yeah, so even if there is a tax on, let's say, ice cream, okay, which is about 5%, but there is a subsidy on meats, which is about 10%, the consumer wants to go ahead and buy the ice cream because they have a saving of about 10% from buying their meat product.

0:29:59 Thomas: Yeah. Yeah.

0:30:43 Thomas: Gotcha.

0:31:00 Thomas: Yeah. Gotcha. So that makes it really complicated.

0:31:01 Wisdom: Yeah. Yeah, yeah, we factor all these interactions into our model to be able to estimate how the consumer will react when the tax is imposed.

0:31:13 Thomas: Yeah. Okay. OK, at first when I read that, I was thinking like, oh, there are things that are that you always buy together or not. But that's not what it is at all, I guess. You know, I think like, you know, foods you'd that only eat both or none, you know, kind of thing like foods that go together more. But it's not really that it's about, you know, just you have a budget for your grocery, visit, I guess. And then if if one thing's been increased in price or decreased in price, it's going to affect everything that you buy. OK, gotcha. Yeah. And that's, boy, that's going to be a complicated thing to calculate, but we'll, we'll try. There's no way I'm checking you on that. So we'll trust, we'll trust that lots of, lots of brilliant minds put to that. And I guess now that we're to this point, what did you find?

0:31:27 Wisdom: Yeah. Yeah, We had positive, a impact of the tax. So if you tax all these products, if you tax biscuits, if we tax sugar drinks, if you tax ice cream, demand is going to reduce. So we expect demand to reduce between 10% and let's say 7%, okay, which is very good, which is quite significant, okay. But what happens is that you tax consumers without any subsidy policy in place, then it means that the other products that they also buy are likely to reduce. So for instance, if we impose the taxes on the high fat, sugar, sugar, and salt products, we expect that vegetable purchase will also reduce by about 5%, and food purchases will also reduce about 2%, which is a negative impact of the policy.

0:32:51 Thomas: Just because that means people can't afford to buy the food they need, right? Or is it, or is it the health impact too?

0:32:52 Wisdom: Yes. No. It means that most people are likely to, you know, they will still buy the soft drinks, okay, so they have to ship monies from some area where they think, well, it's not important to them, to another area where you think it's important to them, okay. So that causes a reduction in the food products that are not also taxed, but if you should tax all these food products, the food product that are high in fat, sugar, and salt, and subsidize fruit and vegetables, there will be a significant increase in the demand for fruit and vegetables, so we expect food purchases to increase by about 12 percent, and vegetable purchases will increase about seven percent, which is very, very good, okay, very, very significant, so that is why we, we saying that, government has the option to tax consumers, but there should always be a subsidy policy in place in such a way that consumers can make up for the loss in income, okay?

We don't advocate for giving money to consumers, but probably something in the form of a voucher can do, which is only supposed to be used to buy fruit and veg, would be a good way to nudge consumers to shift from the high-priced products to those that are subsidized.

0:33:11 Thomas: Yeah. Yeah. Yeah.

0:34:16 Thomas: Yeah. I the situation in the U S seems pretty dire on this. I really wish we just made the healthiest food virtually free for everybody. Cause it just, it just feels like just because of kind of capitalism, I just feels like the least healthy stuff has just been the, the most easy for people to get. And, uh it just seems like on the whole, like regardless of of any sort of feelings about fat phobia or anything like that, any value judgments, it just seems like having, you know, more fruits and vegetables, more of those kinds of food easily available is going to be good regardless of all that. And I really wish that this was something that politicians were more willing to do in my country.

0:34:25 Wisdom: I Politicians always say they are interested in the next election, so what they do is to be in the good books of both the consumer and the manufacturer. So that they can have the the next sponsorship for the election. Yeah.

0:34:59 Thomas: Yeah, yeah, yeah. It's the short term. That's the real challenge. You know, it's the long term problems. There's very little incentive politically to solve a long term problem, especially if it requires short term pain. You know. It's just it's it's tragic. But having more information like your research is definitely one step along the way there. And then it turned out I don't know if you said this but yet. But turned out then that even though, obviously, that second approach of subsidizing, in addition to taxing, seemed like, both morally and health wise, the best option, it had a worse effect on climate, right?

0:35:10 Wisdom: Yes.

0:35:41 Wisdom: That's true, unfortunately.

0:35:42 Thomas: Yeah. So can you explain that?

0:35:45 Wisdom: So we found that, uh, taxing uh high fat sugar and soft drinks, good, okay, but if we decide to subsidize fruit and veg, then emission from food consumption is going to increase by about two percent, this is low, but in terms of impact, I think it's quite high, uh, which is unfortunate, I think this is as a result of the increase in the consumption of meat and fish and also dairy product, as a resort of the subsidy that has been imposed on fruit and veg.

0:36:08 Thomas: Yeah. Well, guess we've got to tax meat a little bit.

0:36:18 Wisdom: Yeah, so that is where something we did not look at, unfortunately. But I think that we could have done another one, which, where we compare the tax on also meat and fish to see if emission is going to reduce or not, but unfortunately, if if you subsidize fruit and veg, consumers have more money, okay, so they are likely to also purchase more meat and fish, and also more dairy product, which which have a high amount of carbon footprint, unfortunately, yeah.

0:36:22 Thomas: Yeah. Yeah. Right. Right.

0:36:47 Thomas: There was also some interesting notes in the further study kind of stuff. One thing that it seems to be a significant sort of I don't know what the word is. I don't want to use like a pejorative word or anything, but kind of a drawback of the study is that this was just take home food. Right. So so it's not like when you're eating out or, because I feel like a lot of the junk food that I buy is way more often that. Like if I'm traveling or if I'M driving or, you know, like when I buy junk food, it's usually because of that. Like the grocery store, it'S usually a little bit more, you KNOW, I'M IN A BETTER MINDSET. I'M LIKE, YEAH, I SHOULD BUY SOME. YOU SEE THOSE FRESH VEGETABLES AROUND THAT INSPIRES YOU TO BE A LITTLE HEALTHIER. BUT YOU GO TO THAT GAS STATION AND YOU JUST SEE THAT CRAP, JUST THE CANDY, YOU KNOW, THAT'S HARD TO RESIST WHEN YOU'RE OUT THERE FOR A DRIVE. So this doesn't really look at that, huh?

0:37:04 Wisdom: Yes. Yeah. Yeah.

0:37:39 Wisdom: So the study is based on food at home, we do not take into account food away from home, unfortunately, it's difficult to get data on food away from home, yeah, so food that consumers buy from all these McDonald's, HKFC, and all that, it's very, very difficult to data on this product, and also from restaurant, so unfortunately our analysis is restricted to only food that is is consumed at home, yeah.

0:37:43 Thomas: Yeah.

0:38:09 Thomas: Yeah. You got to go with the data set that you can get a hold of, I assume. Do you have any indication, any idea of like what percentage that might be, though, of how like how big the person's consumption would be this at-home food? Was there any indication of that?

0:38:09 Wisdom: Yeah. I Think, uh, in the UK, that should be between 10 and 15 percent, if I'm not wrong.

0:38:31 Thomas: 10 and 15% is at home?

0:38:31 Wisdom: Yeah. Yeah. No, no, no, I'm talking about, oh, sorry, that should be away from home. So about 85 percent. Yeah. So about eighty five percent of the food.

0:38:36 Thomas: Oh, gotcha. Yeah, yeah. Okay. Yeah, yeah, yeah. Okay. Well, that means you're covering the vast majority of it, I suppose, huh?

0:38:40 Wisdom: Uh. Yeah. Yeah. I think in the UK, most people cook at home compared to of Europe, where most people buy from restaurants. Here, most People cook

0:38:53 Thomas: Yeah. Compared to here where there's so much fast food, we just buy so much fast food here. Oh, boy. I need to talk to somebody like you who studies us because, well, I'm sure it would be far more disturbing. Is

0:39:10 Wisdom: We do have a lot of fast food here in the U.K., but I think have a tradition of where they usually have a family meal together, at home, so I think that tradition is still on. And most people, even though they eat away from home during the day, and also, yeah, at work, most of the evening meals are eaten together as a family, where it is prepared at home.

0:39:33 Thomas: You I just happened to be in France last week, and it's always funny to check the McDonald's menu or any fast food menu because it's so much different. It's interesting that they even have McDonald's there. I don't know who's buying it, but they have like some really interesting menu items that actually sounded really good. I didn't end up trying it, but I think it's funny how, how much that has to change depending on the region. There's like a blue cheese burger, there's goat cheese, something. It was really fascinating. This was a lot of fun. Is there anything else from your study, uh, or anything else kind of looking forward, for a future study that you want to tell the audience about?

0:39:48 Wisdom: Yeah. Yeah, I think I, so the conclusion of the study is that it's going to be difficult for government to pursue both health and environmental goals together, because there's always going to be a trade-off. Government has to decide whether they are going for health, okay, where the tax these foods that are high in fat, sugar, and salt without giving any subsidy to fruit and veg because of the negative impact on climate, or go for a climate where the goal is to reduce emission without considering the health impact on consumers.

0:40:44 Thomas: So you don't think there's a combination of foods that could be taxed and subsidied, that, that's, it's, maybe if you played with which, than this kind of category of the HFSS or not, there's no combination that you think could reach, both health and climate.

0:40:46 Wisdom: Think It's going to be difficult. We've done some studies on taxing meat and fish, okay, and we found that if you tax meat and fish, consumers are likely to reduce their consumption, okay, and shift towards plant protein. However, the problem is that the type of nutrients that you find in meat and fish is not the same as that which you find in, uh, plant protein, okay.

0:41:26 Wisdom: So even though you are trying to make the diet of consumers healthy by reducing their meat and fish consumption, they will buy more of legumes, more of plant protein, but at the end they are going to lose certain nutrients that are only derived from meat and fish.

0:41:45 Thomas: Well, I don't know. I do fine. I feel like we, I, I dunno what the situation is there, but I think we put a lot of those things in other foods, like, you Know, cereals I and Think there's so much of that that, we put elsewhere, but maybe that's either a different of science or maybe it's not true over there. I don't know.

0:41:46 Wisdom: Get me Yeah. I Think you are right, you could get most of the, uh, nutrient from, let's say, plant protein, okay, but you require high amount of it, which also means that high amount of production, high amount of agricultural land to these types of products, which also means high amount of emission in the end, okay. So there will always be a trade-off between emission and health goal, yeah.

0:42:24 Thomas: Yeah. Well, you know, I assume that that was adjusted because so the chart that tells us which foods are better or worse for emissions, how is that normalized? I mean, there must be some, you knows, is it per serving, per calorie, per weight, per what?

0:42:26 Wisdom: Okay.

0:42:40 Wisdom: The amount of emission here, it's not based on the calorie content of the food, it's just based on the estimated amount of that particular product, a gram So It's emission per gram, yes, not based on the caloric intake, but I think if we had done it based on calories, and I think that the result is going to be somehow different from what we have, yeah.

0:42:51 Thomas: Gram. Okay.

0:43:05 Thomas: Yeah. Well, because, yeah, I guess I didn't think about like you would need to kind of adjust it in order to have it be a solid indication of those tradeoffs. So if, if hypothetically, so meets in that chart, the worst for emissions, but if hypothetrically you would, in order to replace that, you know, nutrition, you would need, I don't know, 10 times something else. I feel like then that that should be reflected somehow. Otherwise, you're not going to be doing as much good for the climate. Was that calculated or accounted for?

0:43:30 Wisdom: Yeah, In this study, okay, we don't take into account that because we were not actually interested in the health impact Okay, Assuming That we want to look at the impact on body weight, then we need to adjust for the caloric intake, okay, for the different types of food to be able to make that conclusion and say, well, if you take, uh, let's say, 100 grams of, let's say, legumes, it's equivalent to taking 50 grams of meat, okay.

0:43:42 Thomas: Sure. Yeah, yeah. Sure.

0:44:03 Wisdom: But we don't do that type of analysis here, we Just decide to go straight forward and use the program of the product, okay, to do the simulation, yeah.

0:44:06 Thomas: Yeah. Gotcha. Okay. So what are you looking to study next?

0:44:17 Wisdom: So currently we are looking at how we could reduce consumer purchases of these products by restricting promotions on these products, it's quite a hot topic here now, so, even if government decides to tax these products, OK, by, let's say, 20 percent, and the retailer decides to offer them on promotion, OK? And give 30 percent discount, and it means that next effect of the tax is zero. You understand? Understand? So we are trying to understand what will happen if governments should restrict promotions on these products, whether consumers are going to buy less or more, or they are going to shift to other products which are more healthier than these products.

0:45:02 Thomas: Yeah, fascinating. Well, I'm looking forward to the results of that. Yeah, no, that'll be fun. We'll keep an eye on it. And Dr. Dugby, thanks so much for your time today. I've really appreciated it.

0:45:05 Wisdom: Sure. You very much for having me, I'm really grateful yeah.

0:45:15 Thomas: There anything you Want to point listeners to, website, you know, anything, uh, social, anything like that, anything you wanna promote?

0:45:23 Wisdom: If you want to know more about our study, yeah, encourage you, you can go to my Google Scholar page and you'll find a lot of articles over there on the topic.

0:45:32 Thomas: Thanks so much again.

0:45:34 Wisdom: Thank you, too.