IDEAS home Printed from https://ideas.repec.org/a/eee/pubeco/v93y2009i5-6p823-830.html
   My bibliography  Save this article

Junk-food, home cooking, physical activity and obesity: The effect of the fat tax and the thin subsidy

Author

Listed:
  • Yaniv, Gideon
  • Rosin, Odelia
  • Tobol, Yossef

Abstract

In an effort to reduce the growing prevalence of obesity, a tax on junk-foods, known as 'fat tax', has been proposed, the revenue from which could be used to finance a 'thin subsidy' for healthy foods or exercising equipment. The present paper addresses the fat tax and thin subsidy within a food-intake rational-choice model. Assuming that healthy meals are cooked at home with purchased ingredients and time input, the paper examines the effects on obesity of a tax on junk-food meals and a subsidy to cooking ingredients, distinguishing between a weight-conscious and a non-weight conscious individual, and between a weight-conscious individual who is physically active and physically inactive. The results show that for a non-weight conscious individual a fat tax will unambiguously reduce obesity, whereas a thin subsidy may increase obesity. However, for a weight-conscious individual, particularly one who is physically active, even a fat tax may increase obesity, as it may reduce not just the consumption of junk-food, but also the time devoted to physical activity. The paper explores conditions under which obesity will rise, fall, or remain intact following the introduction of a fat tax or a thin subsidy.

Suggested Citation

  • Yaniv, Gideon & Rosin, Odelia & Tobol, Yossef, 2009. "Junk-food, home cooking, physical activity and obesity: The effect of the fat tax and the thin subsidy," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 823-830, June.
  • Handle: RePEc:eee:pubeco:v:93:y:2009:i:5-6:p:823-830
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0047-2727(09)00012-7
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Robert Goldfarb & Thomas C. Leonard & Steven Suranovic, 2006. "Modeling Alternative Motives for Dieting," Eastern Economic Journal, Eastern Economic Association, vol. 32(1), pages 115-131, Winter.
    2. David M. Cutler & Edward L. Glaeser & Jesse M. Shapiro, 2003. "Why Have Americans Become More Obese?," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 93-118, Summer.
    3. Jay Bhattacharya & M. Kate Bundorf, 2005. "The Incidence of the Healthcare Costs of Obesity," NBER Working Papers 11303, National Bureau of Economic Research, Inc.
    4. Chou, Shin-Yi & Grossman, Michael & Saffer, Henry, 2004. "An economic analysis of adult obesity: results from the Behavioral Risk Factor Surveillance System," Journal of Health Economics, Elsevier, vol. 23(3), pages 565-587, May.
    5. Levy, Amnon, 2003. "A Theory of LTR Junk-food Consumption," Economics Working Papers wp03-06, School of Economics, University of Wollongong, NSW, Australia.
    6. Anna Sanz De Galdeano, 2005. "The Obesity Epidemic in Europe," CSEF Working Papers 143, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    7. Jacobson, M.F. & Brownell, K.D., 2000. "Small taxes on soft drinks and snack foods to promote health," American Journal of Public Health, American Public Health Association, vol. 90(6), pages 854-857.
    8. Inas Rashad & Michael Grossman & Shin-Yi Chou, 2006. "The Super Size of America: An Economic Estimation of Body Mass Index and Obesity in Adults," Eastern Economic Journal, Eastern Economic Association, vol. 32(1), pages 133-148, Winter.
    9. Tomas J. Philipson & Richard A. Posner, 1999. "The Long-Run Growth in Obesity as a Function of Technological Change," Working Papers 9912, Harris School of Public Policy Studies, University of Chicago.
    10. Tomas Philipson & Richard Posner, 2008. "Is the Obesity Epidemic a Public Health Problem? A Decade of Research on the Economics of Obesity," NBER Working Papers 14010, National Bureau of Economic Research, Inc.
    11. Levy, Amnon, 2002. "Rational eating: can it lead to overweightness or underweightness?," Journal of Health Economics, Elsevier, vol. 21(5), pages 887-899, September.
    12. Ted O'Donoghue & Matthew Rabin, 2003. "Studying Optimal Paternalism, Illustrated by a Model of Sin Taxes," American Economic Review, American Economic Association, vol. 93(2), pages 186-191, May.
    13. Kinsey, Jean D. & Mancino, Lisa, 2004. "Diet Quality And Calories Consumed: The Impact Of Being Hungrier, Busier And Eating Out," Working Papers 14324, University of Minnesota, The Food Industry Center.
    14. Odelia Rosin, 2008. "The Economic Causes Of Obesity: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 22(4), pages 617-647, September.
    15. Rajeev Goel, 2006. "Obesity: An economic and financial perspective," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 30(3), pages 317-324, September.
    16. Darius Lakdawalla & Tomas Philipson & Jay Bhattacharya, 2005. "Welfare-Enhancing Technological Change and the Growth of Obesity," American Economic Review, American Economic Association, vol. 95(2), pages 253-257, May.
    17. Yaniv, Gideon, 2002. "Non-adherence to a low-fat diet: an economic perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 93-104, May.
    18. 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).
    19. Steven M. Suranovic & Robert S. Goldfarb, 2005. "A Behavioral Model of Cyclical Dieting," HEW 0511002, University Library of Munich, Germany.
    20. Gruber, Jonathan & Frakes, Michael, 2006. "Does falling smoking lead to rising obesity?," Journal of Health Economics, Elsevier, vol. 25(2), pages 183-197, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pieroni, Luca & Salmasi, Luca, 2010. "Body weight and socio-economic determinants: quantile estimations from the British Household Panel Survey," ISER Working Paper Series 2010-41, Institute for Social and Economic Research.
    2. Barone, Adriana & O'Higgins, Niall, 2010. "Fat and out in Salerno and its province: Adolescent obesity and early school leaving in Southern Italy," Economics & Human Biology, Elsevier, vol. 8(1), pages 44-57, March.
    3. Zarko Kalamov, 2020. "A sales tax is better at promoting healthy diets than the fat tax and the thin subsidy," Health Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 353-366, March.
    4. Courtemanche, Charles & Carden, Art, 2011. "Supersizing supercenters? The impact of Walmart Supercenters on body mass index and obesity," Journal of Urban Economics, Elsevier, vol. 69(2), pages 165-181, March.
    5. Georgia S. Papoutsi & Andreas C. Drichoutis & Rodolfo M. Nayga Jr., 2013. "The Causes Of Childhood Obesity: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 27(4), pages 743-767, September.
    6. Courtemanche, Charles & Tchernis, Rusty & Ukert, Benjamin, 2018. "The effect of smoking on obesity: Evidence from a randomized trial," Journal of Health Economics, Elsevier, vol. 57(C), pages 31-44.
    7. Courtemanche, Charles & Carden, Art, 2009. "The skinny on big box retailing: Wal-Mart, warehouse clubs, and obesity," MPRA Paper 25326, University Library of Munich, Germany.
    8. Dragone, Davide & Savorelli, Luca, 2012. "Thinness and obesity: A model of food consumption, health concerns, and social pressure," Journal of Health Economics, Elsevier, vol. 31(1), pages 243-256.
    9. Andreas Drichoutis & Rodolfo Nayga & Panagiotis Lazaridis, 2012. "Food away from home expenditures and obesity among older Europeans: are there gender differences?," Empirical Economics, Springer, vol. 42(3), pages 1051-1078, June.
    10. Javier Rivas & Miguel Flores, 2011. "Cash Incentives and Unhealthy Food Consumption," Discussion Papers in Economics 11/47, Division of Economics, School of Business, University of Leicester, revised Jan 2012.
    11. John Tomer, 2011. "What Causes Obesity? And Why Has It Grown So Much?," Challenge, Taylor & Francis Journals, vol. 54(4), pages 22-49.
    12. David G. Blanchflower & Andrew J. Oswald & Bert Van Landeghem, 2009. "Imitative Obesity and Relative Utility," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 528-538, 04-05.
    13. Vincenzo Atella & Joanna Kopinska, 2011. "Body weight of Italians: the weight of Education," CEIS Research Paper 189, Tor Vergata University, CEIS, revised 23 Mar 2011.
    14. García Villar, Jaume & Quintana-Domeque, Climent, 2009. "Income and body mass index in Europe," Economics & Human Biology, Elsevier, vol. 7(1), pages 73-83, March.
    15. Tafreschi, Darjusch, 2015. "The income body weight gradients in the developing economy of China," Economics & Human Biology, Elsevier, vol. 16(C), pages 115-134.
    16. Oswald, Andrew J & Powdthavee, Nattavudh, 2007. "Obesity, Unhappiness, and The Challenge of Affluence : Theory and Evidence," The Warwick Economics Research Paper Series (TWERPS) 793, University of Warwick, Department of Economics.
    17. Charles L. Baum, 2009. "The effects of cigarette costs on BMI and obesity," Health Economics, John Wiley & Sons, Ltd., vol. 18(1), pages 3-19, January.
    18. John Komlos & Ariane Breitfelder & Marco Sunder, 2008. "The Transition to Post-industrial BMI Values Among US Children," NBER Working Papers 13898, National Bureau of Economic Research, Inc.
    19. Charles Courtemanche & Garth Heutel & Patrick McAlvanah, 2015. "Impatience, Incentives and Obesity," Economic Journal, Royal Economic Society, vol. 125(582), pages 1-31, February.
    20. Odelia Rosin, 2012. "Weight‐Loss Dieting Behavior: An Economic Analysis," Health Economics, John Wiley & Sons, Ltd., vol. 21(7), pages 825-838, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:93:y:2009:i:5-6:p:823-830. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nithya Sathishkumar). General contact details of provider: http://www.elsevier.com/locate/inca/505578 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.