The Effects of a Fat Tax on Dairy Products
AbstractWe apply an incomplete demand system to supermarket scanner data to estimate the effects of a fat tax on dairy products for different demographic groups. We find own-price elasticities of demand are relatively inelastic and vary little across groups. A fat tax may be an effective means to raise revenue, but will not result in a significant reduction in fat consumption. The welfare effects associated with a fat tax are large and vary greatly across demographic groups. These fat taxes are regressive in nature, as the elderly and poor suffer greater welfare losses.
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Bibliographic InfoPaper provided by Department of Agricultural & Resource Economics, UC Berkeley in its series Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series with number qt60t1f3tn.
Date of creation: 01 Aug 2005
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fat tax; incomplete demand system; Life Sciences;
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