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Determining the Impact of Food Price and Income Changes on Obesity

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  • Schroeter, Christiane
  • Lusk, Jayson L.
  • Tyner, Wallace E.

Abstract

Despite the significant rise in obesity in the U.S., economic research on obesity is still in its infancy. This paper employs a microeconomic approach to investigate the effects of price and income changes on weight in an effort to determine how a high-calorie food tax, a low-calorie food subsidy, and/or an income changes affect body weight. Although raising the price of high-calorie food typically will likely lead to decreased demand for such goods; it is not clear that such an outcome will actually reduce weight. The model developed in this paper identifies conditions under which price and income changes are mostly likely to actually result in a weight loss. The model is easily implemented using data on own-and cross-price elasticities that are often readily available from extant literature. This is important because survey data that contain both economic information, such as food prices, and weight are extremely rare. Information on relationship between price and weight is critical in developing appropriate public policy and in determining when and where fat taxes, thin subsidies or income re-distribution will achieve the desired objective of reducing obesity.

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File URL: http://purl.umn.edu/19234
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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2005 Annual meeting, July 24-27, Providence, RI with number 19234.

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Date of creation: 2005
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Handle: RePEc:ags:aaea05:19234

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Keywords: Health Economics and Policy;

References

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  1. Huang, Kuo S. & Lin, Biing-Hwan, 2000. "Estimation Of Food Demand And Nutrient Elasticities From Household Survey Data," Technical Bulletins 33579, United States Department of Agriculture, Economic Research Service.
  2. Shin-Yi Chou & Michael Grossman & Henry Saffer, 2002. "An Economic Analysis of Adult Obesity: Results from the Behavioral Risk Factor Surveillance System," NBER Working Papers 9247, National Bureau of Economic Research, Inc.
  3. O'Donoghue, Ted & Rabin, Matthew, 1997. "Doing It Now or Later," Department of Economics, Working Paper Series qt7t44m5b0, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  4. Tomas J. Philipson & Richard A. Posner, 1999. "The Long-Run Growth in Obesity as a Function of Technological Change," NBER Working Papers 7423, National Bureau of Economic Research, Inc.
  5. David Cutler & Edward Glaeser & Jesse Shapiro, 2003. "Why Have Americans Become More Obese?," NBER Working Papers 9446, National Bureau of Economic Research, Inc.
  6. Dhar, Tirtha Pratim & Chavas, Jean-Paul & Cotterill, Ronald W., 2003. "An Economic Analysis of Product Differentiation under Latent Separability," 2003 Annual meeting, July 27-30, Montreal, Canada 21892, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  7. Fred Kuchler & Abebayehu Tegene & J. Michael Harris, 2005. "Taxing Snack Foods: Manipulating Diet Quality or Financing Information Programs?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(1), pages 4-20.
  8. Cash, Sean B. & Sunding, David L. & Zilberman, David, 2004. "Fat Taxes And Thin Subsidies: Prices, Diet, And Health Outcomes," 2004 Annual meeting, August 1-4, Denver, CO 19961, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  9. Lin, Biing-Hwan & Frazao, Elizabeth & Guthrie, Joanne F., 1999. "Away-From-Home Foods Increasingly Important to Quality of American Diet," Agricultural Information Bulletins 33733, United States Department of Agriculture, Economic Research Service.
  10. Albert J. Reed & J. William Levedahl & Charles Hallahan, 2005. "The Generalized Composite Commodity Theorem and Food Demand Estimation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 28-37.
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Cited by:
  1. Just, David R., 2006. "Behavioral Economics, Food Assistance, and Obesity," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 35(2), October.
  2. Asfaw, Abay, 2007. "Do Government Food Price Policies Affect the Prevalence of Obesity? Empirical Evidence from Egypt," World Development, Elsevier, vol. 35(4), pages 687-701, April.

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