This paper uses French food-expenditure data to examine the effect of the local prices of 23 food product categories on the distribution of Body Mass Index (BMI) in a sample of French adults. A dynamic choice model using standard assumptions in Physiology is developed. It is shown that the slope of the price-BMI relationship is affected by the individual's Physical Activity Level (PAL). When the latter is unobserved, identification of price effects at conditional quantiles of the BMI distribution requires quantile independence between PAL and the covariates, especially income. Using quantile regressions, unconditional BMI distributions can then be simulated for various price policies. In the preferred scenario, increasing the price of soft drinks, breaded proteins, deserts and pastries, snacks and ready-meals by 10%, and reducing the price of fruit and vegetables in brine by 10% would decrease the prevalence of overweight and obesity by 14% and 24% respectively. The fall in health care expenditures would represent up to 1.24% of total health care spendings in 2004.
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Paper provided by PSE (Ecole normale supérieure) in its series PSE Working Papers with number
2008-28.
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