Taxes, Prices, and Health Behaviors
Frank Chaloupka, University of Illinois at Chicago
Dr. Chaloupka is distinguished professor of economics at the University of Illinois at Chicago and the university's Institute for Health Research and Policy. He is also a research associate at the National Bureau of Economic Research's Health Economics Program and Program on Children. Since 1997, Dr. Chaloupka has co-directed-with Lloyd Johnston of the University of Michigan-Bridging the Gap, an interdisciplinary research collaborative funded by the Robert Wood Johnson Foundation to improve understanding of the influences of policy, programs, and environment on youth health behavior. Dr. Chaloupka received his doctorate in economics from the City University of New York Graduate School in 1988. Dr. Chaloupka's research interests include the impact of economic, policy, and other environmental influences on health behaviors, including tobacco, alcohol, and illicit drug use; physical activity, diet, and related outcomes; and the economics of tobacco and tobacco control, particularly in developing countries.
Abstract: Over the past few decades, economic and other research has clearly demonstrated the role of price in influencing a variety of health-related behaviors. These include several unhealthy behaviors that, at least in part, arise from imperfect information, time-inconsistent preferences, and addiction that impose costs on those not engaged in the behavior. Together, these suggest that government intervention to manipulate prices through taxes and subsidies can significantly affect these health behaviors and help correct the market failures associated with them. This presentation will review the effectiveness of taxation and other pricing policies in promoting healthy behaviors. The extensive research documenting the impact of tobacco and alcoholic beverage excise taxes on tobacco use, drinking, and their consequences will be reviewed, along with the more limited evidence on the impact of other policies that influence the price of tobacco products and alcoholic beverages. Drawing on these experiences, the potential for using pricing policies to promote healthier eating, physical activity, and to curb obesity will be discussed. Recent trends in food/beverage prices and weight outcomes will be described and findings from the emerging research on price and obesity will be reviewed.