Do Taxes on Unhealthy Foods and Subsidies on Healthy Foods Work in Chile ?: Study of Purchasing Decisions and Food Consumption

Objective: To evaluate the effectiveness of taxes on unhealthy foods and subsidies for healthy foods in modifying the purchasing and consumption behavior of people in the Metropolitan Region, Chile.

Research hypothesis:

1. The application of a tax that increases the price of "High in" foods by 20% will reduce the purchase and consumption of these foods by 24%.
2. The application of a subsidy that reduces the price of fruits and vegetables by 20% will increase the purchase and consumption of these foods by 17%.
3. People of lower socioeconomic status are more sensitive to price changes than people of higher socioeconomic status.

Methodological design. The research proposal proposes an experimental design that will select the participants from a panel composed of people over 18 years of age, men and women, and of all socioeconomic levels. The methodological design considers a random assignment of the people eligible for the study into 3 groups:

1. First group of intervention (GI1): people who will make their purchases with taxes on food and beverages "High in";

2. Second intervention group (GI2): people who will make their purchases with subsidies for fruits and vegetables;

3. Control group (CG) that will make the purchases with the market prices or currently applied by the supermarkets or purchase scenarios.

Methodology. Participants will make a monthly simulated purchase through a simulated supermarket system with products similar to those found in real supermarkets, including "High in" products and fruits and vegetables. Different prices will be applied to each group depending on the type of food. With the data of simulated purchases, a variation of the demand and by socioeconomic subgroup will be calculated. The results will be compared with the control group.

Expected results. GI1 participants are expected to modify their purchase intention with the "High in" food tax, decreasing the purchase of these products in their simulated purchases, compared to CG participants who will make their simulated purchases without taxes. Likewise, IG2 participants are expected to modify their purchase intention with the fruit and vegetable subsidy, increasing the purchase of these foods, compared to CG participants. Finally, it is assumed that the reduction in simulated purchases of "High in" foods and the increase in simulated purchases of fruits and vegetables vary according to socioeconomic level.