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Obesity and Smoking: can we Kill Two Birds with one Tax?

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  • Davide Dragone
  • Francesco Manaresi
  • Luca Savorelli

Abstract

The debate on tobacco and fat taxes often treats smoking and eating as independent behaviors. However, the available evidence shows that they are interdependent, which implies that policies against smoking or obesity may have larger scope than expected. To address this issue, we propose a dynamic rational model where eating, smoking, and physical exercise are simultaneous choices that jointly affect body weight and addiction to smoking. Focusing on direct and cross‐price effects, we study the impact of tobacco and food taxes, and we show that in both cases a single policy tool can reduce both smoking and body weight. Copyright © 2015 John Wiley & Sons, Ltd.

Suggested Citation

  • Davide Dragone & Francesco Manaresi & Luca Savorelli, 2016. "Obesity and Smoking: can we Kill Two Birds with one Tax?," Health Economics, John Wiley & Sons, Ltd., vol. 25(11), pages 1464-1482, November.
    • Handle: RePEc:wly:hlthec:v:25:y:2016:i:11:p:1464-1482
    DOI: 10.1002/hec.3231
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    2. Thomas Eichner & Marco Runkel, 2022. "Non-Paternalistic Foundation of Sugar Taxation and Missing Markets for Sugar Content," CESifo Working Paper Series 9583, CESifo.
    3. Sen Choudhury, Rebecca & Conway, Karen Smith, 2020. "The effect of tobacco policies on youth physical activity," Economics & Human Biology, Elsevier, vol. 38(C).
    4. Michael Grossman, 2022. "The demand for health turns 50: Reflections," Health Economics, John Wiley & Sons, Ltd., vol. 31(9), pages 1807-1822, September.
    5. Luis Rodrigo Arnabal, 2021. "Optimal design of sin taxes in the presence of nontaxable sin goods," Health Economics, John Wiley & Sons, Ltd., vol. 30(7), pages 1580-1599, July.
    6. Strulik, Holger, 2018. "Smoking kills: An economic theory of addiction, health deficit accumulation, and longevity," Journal of Health Economics, Elsevier, vol. 62(C), pages 1-12.

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