After a few months of lurking in this subreddit, I have decided that I will attempt my own R1. Because I am a mere undergraduate, I grasp at some low hanging fruit. /r/The_Donald is terribly cliché, so I will go for Jamie Oliver.

Jamie Oliver: David Cameron must be brave with sugar tax

In the past couple of years, Jamie Oliver has lobbied for a healthier Britain. An admirable goal, certainly, but his proposals are lacking.

His most recent proposal is as follows:

Speaking to a committee of MPs on Monday, Oliver said he had >“robust” discussions with the prime minister about his proposed >introduction of a 20% tax on sugar-sweetened drinks.

Let us breakdown the mechanism by which Oliver hopes to solve Britain's obesity crisis.

*Firstly, the government imposes a 20% ad valorum tax on fizzy drinks. *As a result of this, fizzy drinks get more expensive. *Because the product is more expensive, simple supply and demand economics suggests that quantity demanded will fall. *Fewer bottles of soft drink are consumed, ergo less obesity.

This all seems quite reasonable, why doesn't it work? As anybody who has ever glanced at an Econ 101 textbook will know, the incidence of taxation depends on the price elasticity of demand (PED) and the price elasticity of supply (PES). Subsequently, there are various ways in which Jamie Oliver's mechanism can fail:

*Due to inelastic PED consumers do not respond significantly to increased prices, and their consumption is left unchanged. *Consumers substitute their brand-of-choice fizzy drink with a cheaper brand which is equally (if not more) caloric.

We can look at evidence of other countries' imposition of taxes on unhealthy foodstuffs and drinks to see if either of the above take place. The European Competitiveness and Sustainable Industrial Policy Consortium (ECSIP) found that a 14.8% tax on confectionary in Finland decreased consumption by only 2.6%. Similarly, they found that Finnish annual soft drink price hikes of 7.3% led to falls in consumption of 1% in the year of its and 3.1% the following year. The same effects were observed in other countries.

This study examined the effects of the tax in the US, and could not support the theory that soda taxes had a negative effect on adult obesity.

Seeing as empirical studies show similar taxes to be ineffective in reducing obesity (the stated goal), it is worrying to then consider the adverse effects of such a tax.

Firstly, there is the loss of consumer and producer surplus, as demonstrated on this simple ad valorum tax diagram.

Secondly, because the expenditure on foodstuffs and drinks makes up a larger proportion of a poorer household's budget than a richer one, it is likely that this tax will be regressive.

I cannot finish this R1 without also addressing the ludicrous claim made at the end of the article:

Lifting a can of Red Bull from his bag, Oliver also raised the >possibility of minimum age standards for young children purchasing >drinks heavy in sugar and caffeine from corner shops. “We’ve got >to get medieval on this stuff,” he said.

Medieval indeed. Aside from the fact that most purchasing is done by parents, there is a wealth of literature on the economic consequences of prohibition showing that there are various adverse effects which crop up.

It seems that the best solutions to obesity are not regressive taxes on unhealthy products, but rather education and interesting behavioural economic solutions, such as Bloomberg's infamous 'Sugary Drinks Portion Cap Rule'.