Experimental analysis of the effect of taxes and subsides on calories purchased in an on-line supermarket

Leonard H. Epstein*, Eric Finkelstein, Hollie Raynor, Chantal Nederkoorn, Kelly D. Fletcher, Noelle Jankowiak, Rocco A. Paluch

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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Taxes and subsidies are a public health approach to improving nutrient quality of food purchases. While taxes or subsidies influence purchasing, it is unclear whether they influence total energy or overall diet quality of foods purchased. Using a within subjects design, selected low nutrient dense foods (e.g. sweetened beverages, candy, salty snacks) were taxed, and fruits and vegetables and bottled water were subsidized by 12.5% or 25% in comparison to a usual price condition for 199 female shoppers in an experimental store. Results showed taxes reduced calories purchased of taxed foods (coefficient = -6.61, Cl = -11.94 to -1.28) and subsidies increased calories purchased of subsidized foods (coefficient = 13.74, Cl = 8.51 to 18.97). However, no overall effect was observed on total calories purchased. Both taxes and subsidies were associated with a reduction in calories purchased for grains (taxes: coefficient = -6.58, Cl = -11.91 to -1.24, subsidies: coefficient = -12.86, Cl = -18.08 to -7.63) and subsidies were associated with a reduction in calories purchased for miscellaneous foods (coefficient = -7.40, CI = -12.62 to -2.17) (mostly fats, oils and sugars). Subsidies improved the nutrient quality of foods purchased (coefficient = 0.14, Cl = 0.07 to 0.21). These results suggest that taxes and subsidies can influence energy purchased for products taxed or subsidized, but not total energy purchased. However, the improvement in nutrient quality with subsidies indicates that pricing can shift nutritional quality of foods purchased. Research is needed to evaluate if differential pricing strategies based on nutrient quality are associated with reduction in calories and improvement in nutrient quality of foods purchased.
Original languageEnglish
Pages (from-to)245-251
Publication statusPublished - 1 Dec 2015


  • Taxes
  • Subsidies
  • Purchasing
  • Experimental economics

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