Cutting down on salt: The potential impact of a tax on processed meat to reduce salt intake to the recommended level
Date
2015-12
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Abstract
Should processed meat be taxed in order to reduce salt intake? And if so, by how much? Salt is needed by our bodies to function properly (Chen, Zieve, & Ogilvie, 2014). But if taken excessively, it can lead to high blood pressure (American Heart Association, 2015). According to the World Health Organization, the recommended level of salt intake is 5 grams a day. However, food products such as processed meats which use salt as a preservative contribute to a person’s
excessive salt intake. Consumption of such products drastically increases one Filipino’s salt intake to 15 grams a day (Ong, 2014). Processed meats are said to contribute much to a person’s daily salt intake because of their growing popularity and convenience (Centers for Disease Control and Prevention, 2012). The study of Micha, Michas, and Mozaffarian (2012) shows that processed meats are 400% higher in salt content than unprocessed meats. The consumption of processed meats increases the risks of coronary heart disease (CHDs) and type 2 diabetes. The amount of salt in processed meats accounts for two-thirds of the risk difference. Using the 2013 Annual Poverty Indicator Survey data, we want to test the hypothesis that imposing a tax would decrease per capita processed meat consumption and in turn reduce salt intake to the recommended level. We begin our estimates by using a standard demand model for processed meat with income, own price, and prices of its potential substitutes and complements. Then, we test for alternative model specifications by controlling for other factors such as household features and characteristics of the household head which may affect consumption of processed meat. Our study estimates both the own-price and cross-price elasticity with respect to an increase in the price of processed meat. By simulating price increase levels, we find that imposing a 58% tax on processed meat leads to the 10-gram target reduction in one’s daily salt intake. Our results provide evidence that a policy like food taxation can be an effective mechanism to reduce excessive salt intake of Filipinos and address the health problems associated with it.
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Keywords
salt, salt intake, processed meat, tax, own-price elasticity