Could a Tax on Unhealthy Products Sold for Weight Loss Reduce Consumer Use? A Novel Estimation of Potential Taxation Effects

23 Pages Posted: 11 Jun 2018 Last revised: 20 Jul 2018

See all articles by S. Austin

S. Austin

Harvard University - T.H. Chan School of Public Health

Selena Liu

Simmons College

Nathan Tefft

Bates College

Date Written: May 23, 2018

Abstract

Abuse of widely available, over-the-counter (OTC) drugs and supplements such as diet pills, laxatives, and diuretics by adolescents for weight control is well-documented, yet manufacturers and retailers can sell them to minors without restriction. The aim of our study was to estimate the effect of added taxation of OTC drugs and dietary supplements sold for weight loss on household purchases of these products. With data from 60,538 U.S. households in the 2012 waves of the Nielsen Consumer Panel (NCP) and the Nielsen Retail Scanner (NRS) datasets, we conducted analyses in 2017 to tally annual quantities and expenditures on OTC drugs or dietary supplements making weight-loss, cleanse/detox, or diuretic claims. We estimated the percent reduction in household purchases due to a simulated 20% added tax on each category. Among the 14,151 households reporting at least one purchase in the three claims categories, a 20% higher average price of weight-loss products was associated with a 5.2% lower purchases of those products. Among households with children ages 12 to 17 years old present, purchases were 17.5% lower, and among households with a daughter present, purchases were 10.3% lower. Taxation may be an effective public health strategy to reduce purchasing of potentially dangerous OTC drugs and supplements sold for weight loss, especially for households that include children ages 12-17 years old or a daughter.

Suggested Citation

Austin, S. and Liu, Selena and Tefft, Nathan, Could a Tax on Unhealthy Products Sold for Weight Loss Reduce Consumer Use? A Novel Estimation of Potential Taxation Effects (May 23, 2018). Available at SSRN: https://ssrn.com/abstract=3183814 or http://dx.doi.org/10.2139/ssrn.3183814

S. Austin

Harvard University - T.H. Chan School of Public Health ( email )

677 Huntington Ave
Boston, MA MA 02115
United States

Selena Liu

Simmons College ( email )

300 The Fenway
Boston, MA 02115
United States

Nathan Tefft (Contact Author)

Bates College ( email )

Lewiston, ME 04240
United States

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