And We May Have Yet Another Tax...
A cross between capitalism, dopamine and health, and a business lesson - all packed in one!
Obesity has nearly tripled since 1975. While it has been the cause of several health problems in the past, in current times, the repercussions have increased manifold.
An obese person is 1.5 times more likely to die from Covid (2.25 times in case of severe obesity). It is a problem that deserves both attention and a solution.
But, isn’t obesity a personal problem? Every person has to take care of their own health, right?
Not really. If obesity gets out of control, it can become a national problem. Like it did in the UK.
1 in 3 adults in the UK, over the age of 45, is clinically obese. The government has to spend ~ 18 billion pounds (8% of all healthcare expenses) annually on health problems linked to obesity. Let’s not even get started on the economic value that the nation loses if its people are sick.
Enough about the problems. What’s the solution?
In theory, the suggestions range from educating the masses, making healthy choices available to all, reducing the fat and sugar content from food, supporting regular physical activity (like building open gyms), and reducing the marketing of junk foods.
But, it's easier said than done. The suggestions that look ideal are not very easy to implement. Even if healthier choices are made available at large, will you choose a leafy vegetable curry for dinner over a McDonald’s burger?
A report commission by the UK government suggests taking interventive actions: a new Sugar and Salt Reformulation Tax.
Wait a minute! Another tax? Now, how’s that gonna help?
You see, if you want the population to consume less of something, just increase the taxes on it and make it unaffordable. This is also known as a sin tax: imposed on commodities that are perceived to be harmful to society (and health), such as, cigarettes, alcohol, and in this case, junk food.
This technique has worked in the past. In 2018, the UK imposed a sugar tax. Drinks with more than 8 g sugar/100 mL (high tier) were to be taxed at £0.24/L and drinks with more than 5 g but less than 8 g sugar/100 mL (low tier) were to be taxed at £0.18/L.
Wait. Stop reading. Think - what could have been the outcome?
Well, you'll be surprised to know that it wasn’t the consumers who reduced their purchases. It was the manufacturing companies that reduced the sugar content from the drinks. Everyone won: the government, the consumers, and the companies.
But there have been some instances of failures as well (remember the cobra effect?)!
Denmark became the first country in 2011 to introduce a Junk Food Tax. Sadly, its efforts fell flat. The measure caused significant harm to the food industries and consumers were instead venturing out to borderlands to purchase unhealthy snacks. As a result, within just a year of introduction, the country had to scrap its laws.
But, we can't ignore the fact that junk food is highly addictive (thanks, dopamine). In order to break the habit loop, it’s the mind that ought to be controlled.
Enter: Choice architecture
Instead of driving a point by force, a consumer can be nudged into taking certain decisions.
When we make a decision, we tend to go to our default options (like Paneer Butter Masala and Daal Makhni when we go out for family dinners); and options that give benefit in the short term (that Red Velvet cake is punched with calories, but the taste? Heavenly!).
What if we tell you that these very traits can be used in such a way that it can even change our lifestyle?!
A cafeteria can be designed such that your eyes navigate the healthy options first. The label on the package of the food can highlight the amount of calories that you will add if you consume the food. Having an array of measures like this will require lots of experimentation, planning, resources and time. But, if implemented well, it might help consumers make healthy choices!
Curious to know, would you prefer a junk food tax?
To read up further on how choice architecture can influence the decisions that we make, you can check out this amazing book: Nudge
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