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The Health Effects Of A Fiscal Food Policy

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  • Salois, Matthew J.
  • Tiffin, J. Richard

Abstract

This paper examines the health effects of a fiscal food policy based on a combination of fat taxes and thin subsidies. The fat tax is based on the saturated fat content of food items while the thin subsidy is applied to select fruit and vegetable items. The policy is designed to be revenue neutral so that the subsidy exactly offsets the revenue from the fat tax. A model of food demand is estimated using Bayesian methods that accounts for censoring and infrequency of purchase (the problem of unit values is also discussed). The estimated of demand elasticities are used to compute nutrient elasticities which demonstrate how consumption of specific nutrients changes based on price changes in particular foods from the fiscal policy. Results show that while the fat tax decreases saturated fat intake, consumption of other important nutrients is also decreased, which may lead to negative health outcomes.

Suggested Citation

  • Salois, Matthew J. & Tiffin, J. Richard, 2010. "The Health Effects Of A Fiscal Food Policy," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116394, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa115:116394
    DOI: 10.22004/ag.econ.116394
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    File URL: http://ageconsearch.umn.edu/record/116394/files/1C-3_Salois_Tiffin.pdf
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    References listed on IDEAS

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    Cited by:

    1. Papoutsi, Georgia & Nayga, Rodolfo & Lazaridis, Panagiotis & Drichoutis, Andreas, 2013. "Nudging parental health behavior with and without children's pestering power: Fat tax, subsidy or both?," MPRA Paper 52324, University Library of Munich, Germany.

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