IDEAS home Printed from https://ideas.repec.org/p/gbl/wpaper/201004.html
   My bibliography  Save this paper

To what extent would the poorest consumers nutritionally and socially benefit from a global food tax and subsidy reform ? A framed field experiment based on daily food intake

Author

Listed:
  • Lacroix, A.
  • Muller, L.
  • Ruffieux, B.

Abstract

In this paper we propose a new method in experimental economics, designed to evaluate the effectiveness of public policy incentives aimed at altering consumer behaviors. We apply this method to wide-ranging policies on food prices, which use subsidies to increase the consumption of healthy products and taxes to reduce that of unhealthy ones. Our protocol allows for observation of an individual’s daily food consumption before and after the policy. We examine two separate policies: the one subsidizes fruit and vegetables, while the other one combines taxes and subsidies. We measure their nutritional and economic impacts on the choices of low-income French consumers, compared to a reference group. Both policies have a positive effect on the nutritional quality of food choices of the two groups but initial gaps widen, especially with the subsidies. In the low-income group this can be explained by an initially unfavorable pattern and by weaker price elasticities. The redistributive effects are therefore doubly regressive. Moreover, the individual price elasticities, that the experimental approach enables us to measure, show widely diverse behaviors. They are counter-effective for close to 40% of our sample of poor women.

Suggested Citation

  • Lacroix, A. & Muller, L. & Ruffieux, B., 2010. "To what extent would the poorest consumers nutritionally and socially benefit from a global food tax and subsidy reform ? A framed field experiment based on daily food intake," Working Papers 201004, Grenoble Applied Economics Laboratory (GAEL).
  • Handle: RePEc:gbl:wpaper:201004
    as

    Download full text from publisher

    File URL: https://gael.univ-grenoble-alpes.fr/sites/gael/files/doc-recherche/WP/A2010/gael2010-04.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Wauthy, Xavier, 1996. "Quality Choice in Models of Vertical Differentiation," Journal of Industrial Economics, Wiley Blackwell, vol. 44(3), pages 345-353, September.
    2. Sergio H. Lence & Stéphan Marette & Dermot J. Hayes & William Foster, 2007. "Collective Marketing Arrangements for Geographically Differentiated Agricultural Products: Welfare Impacts and Policy Implications," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 947-963.
    3. Murray Fulton & Konstantinos Giannakas, 2004. "Inserting GM Products into the Food Chain: The Market and Welfare Effects of Different Labeling and Regulatory Regimes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 42-60.
    4. Olivier Bonroy & Christos Constantatos, 2008. "On the use of labels in credence goods markets," Journal of Regulatory Economics, Springer, vol. 33(3), pages 237-252, June.
    5. Paolo Garella & Emmanuel Petrakis, 2008. "Minimum quality standards and consumers’ information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 36(2), pages 283-302, August.
    6. Lapan, Harvey E. & Moschini, GianCarlo, 2007. "AJAE Appendix: Grading, Minimum Quality Standards, and the Labeling of Genetically Modified Products," American Journal of Agricultural Economics Appendices, Agricultural and Applied Economics Association, vol. 89(3), August.
    7. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    8. Lucie Bottega & Jenny De Freitas, 2009. "Public, Private and Nonprofit Regulation for Environmental Quality," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(1), pages 105-123, March.
    9. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," Review of Economic Studies, Oxford University Press, vol. 49(1), pages 3-13.
    10. Harvey Lapan & GianCarlo Moschini, 2007. "Grading, Minimum Quality Standards, and the Labeling of Genetically Modified Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(3), pages 769-783.
    11. Stéphan Marette, 2007. "Minimum safety standard, consumers’ information and competition," Journal of Regulatory Economics, Springer, vol. 32(3), pages 259-285, December.
    12. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
    13. Pilar Useche & Bradford L. Barham & Jeremy D. Foltz, 2006. "Integrating Technology Traits and Producer Heterogeneity: A Mixed-Multinomial Model of Genetically Modified Corn Adoption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(2), pages 444-461.
    14. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June.
    15. Lusk, Jayson L. & Jamal, Mustafa & Kurlander, Lauren & Roucan, Maud & Taulman, Lesley, 2005. "A Meta-Analysis of Genetically Modified Food Valuation Studies," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 30(01), April.
    16. Miklós-Thal, Jeanine & Rey, Patrick & Vergé, Thibaud, 2010. "Vertical relations," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 345-349, July.
    17. Stéphan Marette, 2007. "Minimum Safety Standard, Consumers' Information, and Competition, The," Center for Agricultural and Rural Development (CARD) Publications 07-wp441, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    18. Spence, Michael, 1976. "Product Differentiation and Welfare," American Economic Review, American Economic Association, vol. 66(2), pages 407-414, May.
    19. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    20. Charles Noussair & StÈphane Robin & Bernard Ruffieux, 2004. "Do Consumers Really Refuse To Buy Genetically Modified Food?," Economic Journal, Royal Economic Society, vol. 114(492), pages 102-120, January.
    21. Brian Roe & Ian Sheldon, 2007. "Credence Good Labeling: The Efficiency and Distributional Implications of Several Policy Approaches," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 1020-1033.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    OBESITY; PUBLIC POLICY; SOCIAL INEQUALITIES; POVERTY; INCOME REDISTRIBUTION; REGRESSIVE TAX; INDIVIDUALIZED PRICE INDEX; NUTRITIONAL TAX SYSTEM; FOOD TAX;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:gbl:wpaper:201004. 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: (Agnès Vertier). General contact details of provider: http://edirc.repec.org/data/inragfr.html .

    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.

    We have no references for this item. You can help adding them by using 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.