Skip to main page content
U.S. flag

An official website of the United States government

Dot gov

The .gov means it’s official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

Https

The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Access keys NCBI Homepage MyNCBI Homepage Main Content Main Navigation
. 2023 Jan 17;12(1):22799036221147362.
doi: 10.1177/22799036221147362. eCollection 2023 Jan.

Do tax and subsidy on unhealthy food induce consumer consumption for healthy food? Evidence from experiment in Surabaya, Indonesia

Ni Made Sukartini  1 , Rudi Purwono  1 , Endang Retno Surjaningrum  2 , Thinzar Win  3 , Grace Wangge  4 , Adrian Chrisnahutama  5 , Afanin Husna  5 , Triwuli Handayani  5
Affiliations

Do tax and subsidy on unhealthy food induce consumer consumption for healthy food? Evidence from experiment in Surabaya, Indonesia

Ni Made Sukartini et al. J Public Health Res. .

Abstract

Background: This study investigates the impact of price changes on decision to buy particular foods among adults in Surabaya, East Java, Indonesia. Tax and subsidy were introduced for influencing decision buy particular foods, especially unhealthy foods that are predicted have consequences on health outcome. Unhealthy foods such as fast foods or junk foods, sugar sweetened beverages (SSB), salty, and fatty foods are reported as one of main causes of obesity incidence in most countries, such as Indonesia.

Design and method: Computer laboratory experimental is designed for investigating the impacts of difference rates of taxes and subsidy on decision to buy foods. Taxes and subsidies rate are designed from low (5%), moderate (15%), and high rates (25%).

Results: The findings are as follows. Firstly, participants do not respond immediately to price changes, that is, higher prices due to taxes and lower prices due to subsidies. Economic theory suggests that consumers demand for basic need such as foods is sensitive with change in price, they respond inversely to the price changes. However, the finding in this experimental study do not support this theory prediction. Secondly, 15% and subsidies are the threshold and the larger taxes and rate for changing consumer's choices on targeted foods.

Conclusion: This study concludes that low rates of taxes and subsidies for unhealthy and healthy foods make these targeted foods affordable for majority of consumers. Besides introducing higher rates of taxes and subsidies, promoting and encouraging healthy life style such as consuming fresh and healthy foods is another alternative policy option.

Keywords: health promotion; healthy and unhealthy foods; taxes and subsidies.

PubMed Disclaimer

Conflict of interest statement

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Figures

Figure 1.
Figure 1.
Session 1: Baseline condition, no price differences between choices (a) and (b).
Figure 2.
Figure 2.
Session 10: 25% subsidy for choice (a) and 25% tax added for choice (b).
Figure 3.
Figure 3.
ANOVA table for food choices (Price) versus individual and policy treatment ((a) Tax and subsidy 5%, (b) Tax and subsidy 15%, (c) Tax and subsidy 25%).
See this image and copyright information in PMC

Similar articles

See all similar articles

Cited by

References

    1. Ministry of Health, Indonesia KKR. Paparan Hasil Riset Kesehatan dasar Tahun 2018. Ministry of Health, 2018.
    1. LPM_Sinovia. Pandemi Belum Berakhir, obesitas meningkat. Apa yang Terjadi? https://med.unhas.ac.id/sinovia/2021/06/29/pandemi-belum-berakhir-obesit... (2021, accessed 28 March 2022).
    1. Djalalinia S, Qorbani M, Peykari N, et al.. Health impacts of obesity. Pak J Med Sci 2015; 31(1): 239–242. - PMC - PubMed
    1. Purdy JC, Shatzel JJ. The hematologic consequences of obesity. Eur J Haematol 2021; 106(3): 306–319. - PMC - PubMed
    1. Buchmueller TC, Johar M. Obesity and health expenditures: evidence from Australia. Econ Hum Biol 2015; 17: 42–58. - PubMed

LinkOut - more resources