Obesity-related health impacts of fuel excise taxation- an evidence review and cost-effectiveness study

BACKGROUND Reducing automobile dependence and improving rates of active transport may reduce the impact of obesogenic environments, thereby decreasing population prevalence of obesity and other diseases where physical inactivity is a risk factor. Increasing the relative cost of driving by an increase in fuel taxation may therefore be a promising public health intervention for obesity prevention. METHODS A scoping review of the evidence for obesity or physical activity effect of changes in fuel price or taxation was undertaken. Potential health benefits of an increase in fuel excise taxation in Australia were quantified using Markov modelling to simulate obesity, injury and physical activity related health impacts of a fuel excise taxation intervention for the 2010 Australian population. Health adjusted life years (HALYs) gained and healthcare cost savings from diseases averted were estimated. Incremental cost-effectiveness ratios (ICERs) were reported and results were tested through sensitivity analysis. RESULTS Limited evidence on the effect of policies such as fuel taxation on health-related behaviours currently exists. Only three studies were identified reporting associations between fuel price or taxation and obesity, whilst nine studies reported associations specifically with physical activity, walking or cycling. Estimates of the cross price elasticity of demand for public transport with respect to fuel price vary, with limited consensus within the literature on a probable range for the Australian context. Cost-effectiveness modelling of a AUD0.10 per litre increase in fuel excise taxation using a conservative estimate of cross price elasticity for public transport suggests that the intervention would be cost-effective from a limited societal perspective (237 HALYs gained, AUD2.6 M in healthcare cost savings), measured against a comparator of no additional increase in fuel excise. Under "best case" assumptions, the intervention would be more cost-effective (3181 HALYs gained, AUD34.2 M in healthcare cost savings). CONCLUSIONS Exploratory analysis suggests that an intervention to increase fuel excise taxation may deliver obesity and physical activity related benefits. Whilst such an intervention has significant potential for cost-effectiveness, potential equity and acceptability impacts would need to be minimised. A better understanding of the effectiveness and cost-effectiveness of a range of transport interventions is required in order to achieve more physically active transport environments.