The productivity gains associated with a junk food tax and their impact on cost-effectiveness

Abstract

Objective To estimate the productivity impacts of a policy intervention on the prevention of premature mortality due to obesity. Methods A simulation model of the Australian population over the period from 2003 to 2030 was developed to estimate productivity gains associated with premature deaths averted due to an obesity prevention intervention that applied a 10% tax on unhealthy foods. Outcome measures were the total working years gained, and the present value of lifetime income (PVLI) gained. Impacts were modelled over the period from 2003 to 2030. Costs are reported in 2018 Australian dollars and a 3% discount rate was applied to all future benefits. Results Premature deaths averted due to a junk food tax accounted for over 8,000 additional working years and a $307 million increase in PVLI. Deaths averted in men between the ages of 40 to 59, and deaths averted from ischaemic heart disease, were responsible for the largest gains. Conclusions The productivity gains associated with a junk food tax are substantial, accounting for almost twice the value of the estimated savings to the health care system. The results we have presented provide evidence that the adoption of a societal perspective, when compared to a health sector perspective, provides a more comprehensive estimate of the cost-effectiveness of a junk food tax.