Modelled health benefits of a sugar-sweetened beverage tax across different socioeconomic groups in Australia

A cost-effectiveness and equity analysis

Anita Lal, Ana Maria Mantilla-Herrera, Lennert Veerman, Kathryn Backholer, Gary Sacks, Marjory Moodie, Mohammad Siahpush, Rob Carter, Anna Peeters

Research output: Contribution to journalArticle

27 Citations (Scopus)

Abstract

Background: A sugar-sweetened beverage (SSB) tax in Mexico has been effective in reducing consumption of SSBs, with larger decreases for low-income households. The health and financial effects across socioeconomic groups are important considerations for policy-makers. From a societal perspective, we assessed the potential cost-effectiveness, health gains, and financial impacts by socioeconomic position (SEP) of a 20% SSB tax for Australia. Methods and findings: Australia-specific price elasticities were used to predict decreases in SSB consumption for each Socio-Economic Indexes for Areas (SEIFA) quintile. Changes in body mass index (BMI) were based on SSB consumption, BMI from the Australian Health Survey 2011–12, and energy balance equations. Markov cohort models were used to estimate the health impact for the Australian population, taking into account obesity-related diseases. Health-adjusted life years (HALYs) gained, healthcare costs saved, and out-of-pocket costs were estimated for each SEIFA quintile. Loss of economic welfare was calculated as the amount of deadweight loss in excess of taxation revenue. A 20% SSB tax would lead to HALY gains of 175,300 (95% CI: 68,700; 277,800) and healthcare cost savings of AU$1,733 million (m) (95% CI: $650m; $2,744m) over the lifetime of the population, with 49.5% of the total health gains accruing to the 2 lowest quintiles. We estimated the increase in annual expenditure on SSBs to be AU$35.40/capita (0.54% of expenditure on food and non-alcoholic drinks) in the lowest SEIFA quintile, a difference of AU$3.80/capita (0.32%) compared to the highest quintile. Annual tax revenue was estimated at AU$642.9m (95% CI: $348.2m; $1,117.2m). The main limitations of this study, as with all simulation models, is that the results represent only the best estimate of a potential effect in the absence of stronger direct evidence. Conclusions: This study demonstrates that from a 20% tax on SSBs, the most HALYs gained and healthcare costs saved would accrue to the most disadvantaged quintiles in Australia. Whilst those in more disadvantaged areas would pay more SSB tax, the difference between areas is small. The equity of the tax could be further improved if the tax revenue were used to fund initiatives benefiting those with greater disadvantage.

Original languageEnglish (US)
Article numbere1002326
JournalPLoS Medicine
Volume14
Issue number6
DOIs
StatePublished - Jun 1 2017

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Beverages
Insurance Benefits
Cost effectiveness
Taxation
Sugars
Cost-Benefit Analysis
Health
Quality-Adjusted Life Years
Taxes
Health Expenditures
Economics
Health Care Costs
Vulnerable Populations
Body Mass Index
Costs
Cost Savings
Elasticity
Financial Management
Mexico
Health Surveys

ASJC Scopus subject areas

  • Medicine(all)

Cite this

Modelled health benefits of a sugar-sweetened beverage tax across different socioeconomic groups in Australia : A cost-effectiveness and equity analysis. / Lal, Anita; Mantilla-Herrera, Ana Maria; Veerman, Lennert; Backholer, Kathryn; Sacks, Gary; Moodie, Marjory; Siahpush, Mohammad; Carter, Rob; Peeters, Anna.

In: PLoS Medicine, Vol. 14, No. 6, e1002326, 01.06.2017.

Research output: Contribution to journalArticle

Lal, Anita ; Mantilla-Herrera, Ana Maria ; Veerman, Lennert ; Backholer, Kathryn ; Sacks, Gary ; Moodie, Marjory ; Siahpush, Mohammad ; Carter, Rob ; Peeters, Anna. / Modelled health benefits of a sugar-sweetened beverage tax across different socioeconomic groups in Australia : A cost-effectiveness and equity analysis. In: PLoS Medicine. 2017 ; Vol. 14, No. 6.
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abstract = "Background: A sugar-sweetened beverage (SSB) tax in Mexico has been effective in reducing consumption of SSBs, with larger decreases for low-income households. The health and financial effects across socioeconomic groups are important considerations for policy-makers. From a societal perspective, we assessed the potential cost-effectiveness, health gains, and financial impacts by socioeconomic position (SEP) of a 20{\%} SSB tax for Australia. Methods and findings: Australia-specific price elasticities were used to predict decreases in SSB consumption for each Socio-Economic Indexes for Areas (SEIFA) quintile. Changes in body mass index (BMI) were based on SSB consumption, BMI from the Australian Health Survey 2011–12, and energy balance equations. Markov cohort models were used to estimate the health impact for the Australian population, taking into account obesity-related diseases. Health-adjusted life years (HALYs) gained, healthcare costs saved, and out-of-pocket costs were estimated for each SEIFA quintile. Loss of economic welfare was calculated as the amount of deadweight loss in excess of taxation revenue. A 20{\%} SSB tax would lead to HALY gains of 175,300 (95{\%} CI: 68,700; 277,800) and healthcare cost savings of AU$1,733 million (m) (95{\%} CI: $650m; $2,744m) over the lifetime of the population, with 49.5{\%} of the total health gains accruing to the 2 lowest quintiles. We estimated the increase in annual expenditure on SSBs to be AU$35.40/capita (0.54{\%} of expenditure on food and non-alcoholic drinks) in the lowest SEIFA quintile, a difference of AU$3.80/capita (0.32{\%}) compared to the highest quintile. Annual tax revenue was estimated at AU$642.9m (95{\%} CI: $348.2m; $1,117.2m). The main limitations of this study, as with all simulation models, is that the results represent only the best estimate of a potential effect in the absence of stronger direct evidence. Conclusions: This study demonstrates that from a 20{\%} tax on SSBs, the most HALYs gained and healthcare costs saved would accrue to the most disadvantaged quintiles in Australia. Whilst those in more disadvantaged areas would pay more SSB tax, the difference between areas is small. The equity of the tax could be further improved if the tax revenue were used to fund initiatives benefiting those with greater disadvantage.",
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AU - Veerman, Lennert

AU - Backholer, Kathryn

AU - Sacks, Gary

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