Diet & Dollars: Interdisciplinary research team studies how fiscal incentives can promote healthy eating

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Healthy eating benefits everyone, and food choices can be an important part of that equation. But can consumers be financially incentivized to make healthier food purchases?

An Auburn University interdisciplinary research group, overseen by Dr. Tannista Banerjee, collaborated with the Radio Frequency Identification (RFID) lab to conduct experimental economics and neurobehavioral analysis to find out.

The researchers investigated how fiscal interventions in the form of lower sales taxes and store discounts on healthy food items impact the purchase of both healthy and unhealthy food items among low socioeconomic status parents. Banerjee worked with Dr. Veena Chattaraman of the Department of Consumer and Design Sciences, College of Human Sciences, the MRI Research Center and Dr. Gopikrishna Deshpande of the Department of Electrical and Computer Engineering.

“Given the rising health care costs associated with obesity, governments have tried different policy interventions, but the efficacy of such fiscal policies is currently being debated,” said Banerjee, an associate professor in the Department of Economics in the College of Liberal Arts.

Based on these findings, their research was accepted and published in Nature, Scientific Reports. The full paper is available at

“Our study is the first study to measure choice behavior in a semi-realistic shopping environment, employing neural correlates with both electroencephalography (EEG) and functional magnetic resonance imaging (fMRI). This paper is important as it solves a long-standing debate in experimental and health economics and has important health policy implications. The brain processes underlying the effectiveness of public policy interventions employing sales taxes and discounts [were] unexplored, and we investigated this,” Banerjee said.

Banerjee created a grocery store environment in the RFID lab to facilitate the shopping experiment for low-income parents. Researchers collected behavioral and EEG data in the RFID lab while participants completed their grocery shopping. Later, Deshpande collected brain activity data of participants through non-invasive neuroimaging at the MRI Research Center.

Auburn's intramural grants program, the College of Liberal Arts, the Department of Economics, the College of Human Sciences, the Department of Consumer and Design Sciences, and the MRI Research Center provided the financial support for this research. The RFID lab provided material support.

The results show that with lower taxes and greater store discounts, participants bought more healthy food and less unhealthy food. The study demonstrates that both fiscal interventions improve dietary choices by significantly reducing the purchase of calories, sugar, added sugar, saturated fat and sodium, while significantly increasing dietary fiber purchased. These results provide preliminary evidence that fiscal interventions tested in this study have the potential to promote healthy food choices among low socioeconomic status households and reduce obesity. This study also shows the important role that lower food taxes and greater store discounts (on healthy food) can play in encouraging parents to choose healthier foods for their family.