STEVE POLLARD |
This should be the time to recall the value of human health, but how is it really valued, and can the value of health be influenced?
Although Pacific Island Countries (PICs) have so far largely escaped the worst of the health impacts of the COVID-19 pandemic, they cannot be complacent. The pandemic still presents a great threat to human life in the PICs today and Pacific islanders are even more susceptible to the severe consequences of COVID-19 because of the predominance of pre-existing health concerns, notably of obesity, diabetes, and serious heart conditions.
Noncommunicable Diseases (NCDs) have become one of the greatest constraints to social and economic progress in the PICs. Alcohol, tobacco, fatty foods, sweetened drinks and a lack of exercise are considered to be the main culprits. The region is replete with policies and programs to alleviate NCDs through taxation, consumer protection, public education, and controls over commerce and trade. There has been some positive impact on improving some aspects of people’s lifestyles. However, NCDs continue to account for shorter, less healthy and less productive lives for far too many islanders, and a medical expense that Pacific families and governments can ill afford. Now COVID-19 places NCDs in an even more frightening health perspective.
Societies can take a long time to change their food habits and preferences and thereby lessen the incidence of NCDs. However, as previously stated, transformative events such as COVID-19 though they fortunately rarely occur, can nevertheless change societies’ perspectives and preferences. Moreover, given societies’ continuing demand for those items that cause NCDs government intervention can be justified.
Each intervention to reduce NCDs likely reinforces the impact of some others and a package of interventions is considered necessary to sustainably alter long-established tastes and habits. But which particular package best suits each unique community today? Which set of interventions is more likely to help reduce NCDs? Which package is the most cost-effective to prioritise? Alternatively, how can the demand for the perpetrators or causes of NCDs and therefore the implied demand for better health be best influenced?
The demand for those items that lead to ill health in the case of NCDs, that is, the demand for alcohol, tobacco, processed and other foodstuffs high in fats and salt, as with other goods and services is considered by economists to be a function of: (i) the price of that good or service, (ii) the prices of other competing and, or complementary goods and services, (iii) levels of income and (iv) other related factors, usually grouped under the title of “taste” or “other preferences”. There have been some attempts to quantify the demand for these particular items, including most recently in Tonga. However, these econometric studies cannot usually extend beyond an analysis of the impact of prices and incomes on demand due to data limitations.
In the case of tobacco where most assessments have focused, they tend to argue that the elasticity or sensitivity of demand for tobacco is low; that is, as the price of tobacco increases there is a much less than proportionate decrease in demand. However, in some countries in Asia the demand for tobacco has been assessed to be more sensitive at lower levels of income encouraging the poor and young not to smoke. Price elasticities for alcohol products may also vary. Price inelasticity can lead to a situation where “health taxes” can be more important to governments as a source of public revenue than as a means to a healthier society unless the public funds raised are returned to health programs. Increased taxation has however led to a recorded reduction in consumption of imported alcohol in Tonga. The demand for fatty foods appears to be generally more price elastic, especially at lower levels of income depending on the particular item.
As has recently been discovered in Tonga, the prices of other substitute goods can greatly influence demand. With increased taxation, the prices of imported alcohol, tobacco, some fatty foods and sweetened beverages have increased and consumers have tended to switch their consumption to lower-priced imported alternatives and lower-priced locally produced commodities where available, including locally manufactured alcohol and sweet drinks and locally grown tobacco. Some consumers have switched from consumption of imported alcohol, tobacco, and sweetened drinks to lesser taxed and lower-priced domestically produced alternatives. This illustrates the inconsistency of government policy when local manufacture is supported by the government in the interest of employment generation
Quantitative analysis of the demand cannot readily incorporate the impact of education, peer pressure and other social pressures (“Taste”) on the consumption of the goods and services that cause NCDs. But these peer pressure social impacts might reasonably be considered to provide a much greater influence on consumption, most especially within the close-knit, family, clan and church-led island communities of the PICs. The World Health Organization provides many examples of countries that have succeeded in introducing more healthy diets, placing a lot of emphasis on education. However, it can be a challenge to sustain such an impact. A Government of Tonga healthy eating discussion paper concludes that cost, convenience and social standing are higher motivating factors when purchasing foods and these motivations have led to increasingly unhealthy food patterns. Islanders interviewed agreed that the churches would be able to impart a great influence on reducing the demand for NCD-related consumption. However, maintaining the momentum generated by such initiatives may again be a challenge.
While the demand function is limited in its predictive ability this need not be the end to securing a more complete understanding of the demand for foods, beverages and lifestyles that lead to NCDs so that more effective public policies and programs can be designed. Of particular concern is how to design programs focused as much on social pressure and preferences as on taxation.
The corporate world invests heavily in market research. One of the tools of this work is the market research panel. Research panels are a quick, inexpensive way to more fully understand demand. This has been employed in Tonga to help determine packaging that may best deter smoking. Panels could be employed more generally to better design the full mix of policies and programs that can alter the consumption that leads to NCDs. If only a small fraction of the money spent on determining how to increase consumption could be spent on shaping a decrease in the demand for those particular items that tend to cause NCDs, the PICs’ government policies and programs would be better designed to more favorably improve the implied demand for health.
Steve Pollard has been known in the Pacific islands as a government employee, researcher, consultant, and donor staffer, retired from the ADB in 2011. He has 38 years of experience working toward the interests of better policy for better livelihoods in the Pacific and 48 years of experience in development.
