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Optimal Food Waste: Taxes and Government Incentives

Author

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  • Katare, Bhagyashree
  • Serebrennikov, Dmytro
  • Wang, H. Holly
  • Wetzstein, Michael

Abstract

In 2010, 21% of the total U.S. food available for consumption was wasted at the household level. In response to this waste, a number of counties and U.S. localities have instituted policies (disposal taxes) directed toward reducing this waste. However, currently, there is no federal food-waste disposal tax. The aim of this paper is to establish a theoretical foundation for household food waste, and based on this theory, determine an optimal food-waste (disposal) tax along with government incentives. The theory unravels the interrelation between social food insecurity and external environmental costs, not generally considered by households when they waste food. An optimal disposal tax and government incentives involve Pigovian mechanisms and government benefits. For a zero level of food waste, the optimal disposal taxes and government incentives approach infinity.

Suggested Citation

  • Katare, Bhagyashree & Serebrennikov, Dmytro & Wang, H. Holly & Wetzstein, Michael, 2016. "Optimal Food Waste: Taxes and Government Incentives," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 252703, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:252703
    DOI: 10.22004/ag.econ.252703
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    References listed on IDEAS

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    1. Kevin D Hall & Juen Guo & Michael Dore & Carson C Chow, 2009. "The Progressive Increase of Food Waste in America and Its Environmental Impact," PLOS ONE, Public Library of Science, vol. 4(11), pages 1-6, November.
    2. Vedenov, Dmitry & Wetzstein, Michael, 2008. "Toward an optimal U.S. ethanol fuel subsidy," Energy Economics, Elsevier, vol. 30(5), pages 2073-2090, September.
    3. Kantor, Linda Scott & Lipton, Kathryn & Manchester, Alden & Oliveira, Victor, 1997. "Estimating and Addressing America's Food Losses," Food Review/ National Food Review, United States Department of Agriculture, Economic Research Service, vol. 20(1), pages 1-11.
    4. Buzby, Jean C. & Hyman, Jeffrey, 2012. "Total and per capita value of food loss in the United States," Food Policy, Elsevier, vol. 37(5), pages 561-570.
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    Keywords

    Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety;

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