Consumer heterogeneity in emission and diet impacts of meat taxes

Many consumers in high-income countries do not adhere to dietary guidelines. This imposes a threat to their health and to the environment as some of the excessively consumed foods also have high emission footprints. Food price changes (e.g. enforced through taxes) are a promising lever to steer consumers toward a recommended diet. However, a country-level pricing policy fails to only target those consumers that do not follow dietary recommendations but affect all consumers. Here, we estimate individual household-specific demand systems using a locally-weighted approach to capture differences in the preference structure and price sensitivity of consumers. We compare these to a pooled estimation and assess elasticity differences and implications for meat tax simulations. Tax-induced meat consumption reductions, embedded greenhouse gas emission savings and the level of adherence to dietary recommendations are compared at the national level and for consumer groups defined based on their baseline meat intake. Our findings stress that without considering heterogeneity in price responsiveness, we tend to over-estimate benefits from pricing policies. Consumers eating more meat than recommended are less responsive to price changes, but would still contribute most to emission savings and show the largest absolute dietary improvements.