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The Effects of a Fat Tax on Dairy Products

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  • Chouinard, Hayley H.
  • Davis, David E.
  • LaFrance, Jeffrey T.
  • Perloff, Jeffrey M.

Abstract

We apply an incomplete demand system to supermarket scanner data to estimate the effects of a fat tax on dairy products for different demographic groups. We find own-price elasticities of demand are relatively inelastic and vary little across groups. A fat tax may be an effective means to raise revenue, but will not result in a significant reduction in fat consumption. The welfare effects associated with a fat tax are large and vary greatly across demographic groups. These fat taxes are regressive in nature, as the elderly and poor suffer greater welfare losses.

Suggested Citation

  • Chouinard, Hayley H. & Davis, David E. & LaFrance, Jeffrey T. & Perloff, Jeffrey M., 2005. "The Effects of a Fat Tax on Dairy Products," CUDARE Working Papers 25078, University of California, Berkeley, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucbecw:25078
    DOI: 10.22004/ag.econ.25078
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    References listed on IDEAS

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    Cited by:

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    2. Alberto Pench, 2020. "Time Allocation and Snacks and Sugar Sweetened Beverages Taxation," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(3), pages 469-492, November.
    3. Rahkovsky, Ilya & Gregory, Christian A., 2013. "Food prices and blood cholesterol," Economics & Human Biology, Elsevier, vol. 11(1), pages 95-107.
    4. Nordstrom, Jonas & Thunstrom, Linda, 2007. "Effects of Economic Policies Aimed at Encouraging a Healthier Grain Consumption," 2007 1st Forum, February 15-17, 2007, Innsbruck, Austria 6611, International European Forum on System Dynamics and Innovation in Food Networks.
    5. Alberto Pench, 0. "Time Allocation and Snacks and Sugar Sweetened Beverages Taxation," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 0, pages 1-24.
    6. Allais, Olivier & Bertail, Patrice & Nichele, Veronique, 2008. "The Effects of a "Fat Tax" on the Nutrient Intake of French Households," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43967, European Association of Agricultural Economists.

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