Different approaches have been designed to address obesity. One approach has been to change the buying behavior of consumers by making healthier snacks more attractive. A “fat tax” levied on unhealthy snacks could be a possible effective intervention. The current study surveyed consumers from eight supermarkets in different communities. It found that there are subgroups of consumers with different sensitivity to a warning label and the price. This indicated that responses to snack food taxes and warning labels would also be different.
Obesity is a serious health problem for individuals and society in general. In 2001, the direct and indirect economic costs of obesity in Canada were estimated at 4.3 billion dollars. A contributing cause of obesity is the consumption of high calorie food with low satiety potential, commonly called junk food. Consumers can potentially be persuaded to avoid junk food, if its cost is higher than healthier options. One way to achieve this is to add a “fat tax” on junk food, with a warning label indicating why such a tax has been imposed. The current study examined the effectiveness of both price interventions and warning label interventions, using “choice experiments”.
* Surveys were conducted at eight supermarkets. The study included 101 consumers from suburban areas, 110 participants from urban areas, 102 participants from rural areas and 108 participants from small cities.
* The participants answered a survey in which they had to choose from the following: less healthy snack product, a healthy snack product or neither. There were four possible price levels: $0.50, $1.00, $1.50 and $2.00.
* A “nutrition facts” panel, containing nutritional information for each product, was displayed. On some less healthy choices, a warning label was attached.
* The participants entered their preferences in small electronic hand-held devices. The responses were analyzed to document purchasing behavior. Participants’ body mass indices were also calculated.
* The researchers identified three groups of consumers, based on their decision making process – Warning Label Heeders, Unhealthy Snack Avoiders, Price Sensitive Class.
* Males and persons with higher body mass index (a measure of obesity) were likely to belong to Warning Label Heeders. For members of this class, who strongly avoided products displaying the warning label, a “fat tax” might not be necessary. They were not sensitive to the price of the product by itself, but a warning label caused them to choose higher-priced options.
* The Unhealthy Snack Avoiders consisted of people who avoided choosing the less healthy options. Members of this class, mostly males, did not respond to the warning label directly but avoided products that had a warning label and were priced higher. A warning label would make the “fat tax” effective for this group.
* The Price Sensitive Class consisted of people who strongly preferred cheap snacks and more traditional snacks, such as fried potato chips and pretzels. Females were more likely to belong to this class. Members of this group were almost twice as price sensitive as all the groups considered together. A “fat tax” by itself might impact this group’s behavior the most.
This study was based on voluntary participation in a supermarket, at daytime hours, during weekdays. Those who did not participate might have different buying behavior. The answers provided in this survey might be biased towards healthier snack options, as actual buying was not undertaken by the participants. The warning labels on unhealthy snacks were unfamiliar and this might have caught the participants’ attention.
Making consumers buy healthy food is one way of addressing the epidemic of obesity and related health hazards. This is viewed as a step that might result in improvements in public health. Using a warning label on unhealthy snacks and pricing them higher than healthier options are strategies that might work. However, this study found that there are different classes of consumers, with each class displaying a different behavior in response to such strategies. Thus, actual changes in the consumption of snacks would depend upon different consumer segments. So any public health benefits that might be achieved would not be uniform across the population.
For More Information:
Heterogeneous Consumer Responses to Snack Food Taxes and Warning Labels
Publication Journal: The Journal of Consumer Affairs, 2011
By Ryan D Lacanilao; Sean B Cash; University of Alberta, Canada and University of Wisconsin-Madison, Wisconsin
*FYI Living Lab Reports Are Summaries of the Original Research