Grocery food taxes and U.S. county obesity and diabetes rates.

BACKGROUND: Grocery food taxes represent a stable tax revenue stream for state and municipal government during times of adverse economic shocks such as that observed under the coronavirus disease 2019 (COVID-19) pandemic. Previous research, however, suggests a possible mechanism through which grocery taxes may adversely affect health. Our objectives are to document the spatial and temporal variation in grocery taxes and to empirically examine the statistical relationship between county-level grocery taxes and obesity and diabetes. METHODS: We collect and assemble a novel national dataset of annual county and state-level grocery taxes from 2009 through 2016. We link this data to three-year, county-level estimates based on data from the Centers for Disease Control and Prevention on rates of obesity and diabetes and provide a nation-wide spatial characterization of grocery taxes and these two health outcomes. Using a county-level fixed effects estimator, we estimate the effect of grocery taxes on obesity and diabetes rates, also controlling for a subset of potential confounders that vary over time. RESULTS: We find a 1 percentage point increase in grocery taxes is associated with 0.588 and 0.215 percentage point increases in the county-level obesity and diabetes rates. CONCLUSION: Counties with grocery taxes have increased prevalence of obesity and diabetes. We estimate the economic burden of increased obesity and diabetes rates resulting from grocery taxes to be $5.9 billion. Based on this estimate, the benefit-cost ratio of removing grocery taxes across the United States only considering the effects on obesity and diabetes rates is 1.90.

Signaling impacts of GMO labeling on fruit and vegetable demand.

Food labels may have both informational and signaling influences on consumer demand. We conduct a choice experiment with over 1,300 subjects to examine the signaling effect of the food product labels on consumer demand for other competing products in the market. Specifically, we focus on the genetically modified (GM) text labeling for fresh produce (strawberries, apples, and potatoes) in the United States. Contrary to some previous studies, our results indicate that the absence-claim label (Not-GM) does not have a negative impact on the demand for related conventional products. Instead, we find that consumer demand for unlabeled products is significantly enhanced with the introduction of presence-claimed GM labels. Our results contribute to the ongoing discussion of the enactment of mandatory labeling for GM foods by the federal U.S. government. Our results suggest that, in the case of direct text disclosure labels, consumers may no longer differentiate between unlabeled products and Not-GM-labeled products after the mandatory GM labeling law is in effect.

Absence labels: How does information about production practices impact consumer demand?

Absence labels promote the absence of a particular ingredient or production practice. Consumers usually perceive organic labels as an umbrella absence label for a variety of ingredients and production practices. Such organic labels often use similar language but are based on different certification requirements. For example, both organic wine and wine made with organic grapes are available to U.S. consumers, but little is known about consumer preferences for such labeled products when information about the certification standards is available. Moreover, while absence labels, which advertise the absence of certain attributes or practices, are prevalent on the market, little is known about how information on conventional production practices impacts consumer behavior. Using an artefactual experiment with 128 adult non-student participants, we investigate consumer demand for conventional wine, organic wine, and wine made with organic grapes when information about production standards is provided to participants with and without details regarding conventional winemaking practices. We find that while both organic labels carry a significant and very similar willingness-to-pay (WTP) premium, information about certification standards and conventional wine making practices can reduce WTP for all wines. Providing information about the two organic certification standards reduces consumer WTP for both absence labeled and conventional wine categories. This effect largely disappears for organic wine, but not wine made with organic grapes, when information about conventional wine-making practices is also provided.

The impact of a supermarket nutrition rating system on purchases of nutritious and less nutritious foods.

OBJECTIVE: The current study examines the impact of a nutrition rating system on consumers' food purchases in supermarkets. DESIGN: Aggregate sales data for 102 categories of food (over 60 000 brands) on a weekly basis for 2005-2007 from a supermarket chain of over 150 stores are analysed. Change in weekly sales of nutritious and less nutritious foods, after the introduction of a nutrition rating system on store shelves, is calculated, controlling for seasonality and time trends in sales. SETTING: One hundred and sixty-eight supermarket stores in the north-east USA, from January 2005 to December 2007. SUBJECTS: Consumers purchasing goods at the supermarket chain during the study period. RESULTS: After the introduction of the nutrition ratings, overall weekly food sales declined by an average of 3637 units per category (95 % CI -5961, -1313; P<0·01). Sales of less nutritious foods fell by 8·31 % (95 % CI -13·50, -2·80 %; P=0·004), while sales of nutritious foods did not change significantly (P=0·21); as a result, the percentage of food purchases rated as nutritious rose by 1·39 % (95 % CI 0·58, 2·20 %; P<0·01). The decrease in sales of less nutritious foods was greatest in the categories of canned meat and fish, soda pop, bakery and canned vegetables. CONCLUSIONS: The introduction of the nutrition ratings led shoppers to buy a more nutritious mix of products. Interestingly, it did so by reducing purchases of less nutritious foods rather than by increasing purchases of nutritious foods. In evaluating nutrition information systems, researchers should focus on the entire market basket, not just sales of nutritious foods.