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The Impact of Tax Reforms Designed to Encourage a Healthier Grain Consumption

Author

Listed:
  • Nordström, Jonas

    (Institute of Food and Resource Economics)

  • Thunström, Linda

    (The Swedish Retail Institute)

Abstract

In this paper, we simulate the effects of taxes on products and/or nutrients aimed at encouraging a healthier grain consumption. To carry out the analysis, we use a rich data set on household consumption of grain products, combined with information about the nutritional content of the products. We estimate behavioural parameters that are used to simulate the impact on the average household of different types of tax reforms; entailing either a subsidy on commodities particularly rich in fibre or a subsidy of the fibre density in grain products. Our results suggest that to direct the fibre intake of the average household towards nutritional recommendations, reforms with a substantial impact on consumer prices are required. Our results also imply that subsidizing the fibre density is more cost-efficient than reducing the VAT on commodities rich in fibre. Regardless of the type of subsidy imposed, the increase in the fibre intake is accompanied by unwanted increases in the nutrients that are often over consumed; fat, saturated fat, salt and sugar and added sugar. Funding the subsidies by taxing these nutrients, or less healthy commodities, prevents such developments.

Suggested Citation

  • Nordström, Jonas & Thunström, Linda, 2007. "The Impact of Tax Reforms Designed to Encourage a Healthier Grain Consumption," HUI Working Papers 11, HUI Research.
    • Handle: RePEc:hhs:huiwps:0011
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    2. Capacci, Sara & Mazzocchi, Mario, 2011. "Five-a-day, a price to pay: An evaluation of the UK program impact accounting for market forces," Journal of Health Economics, Elsevier, vol. 30(1), pages 87-98, January.
    3. Nordström, Jonas & Thunström, Linda, 2011. "Can targeted food taxes and subsidies improve the diet? Distributional effects among income groups," Food Policy, Elsevier, vol. 36(2), pages 259-271, April.
    4. Härkänen, Tommi & Kotakorpi, Kaisa & Pietinen, Pirjo & Pirttilä, Jukka & Reinivuo, Heli & Suoniemi, Ilpo, 2014. "The welfare effects of health-based food tax policy," Food Policy, Elsevier, vol. 49(P1), pages 196-206.
    5. Christian M{o}ller Dahl & Nadja van 't Hoff & Giovanni Mellace & Sinne Smed, 2023. "Nudging Nutrition: Lessons from the Danish "Fat Tax"," Papers 2312.11481, arXiv.org, revised Nov 2024.
    6. Jensen, Jørgen Dejgård & Smed, Sinne, 2013. "The Danish tax on saturated fat – Short run effects on consumption, substitution patterns and consumer prices of fats," Food Policy, Elsevier, vol. 42(C), pages 18-31.
    7. Ryota Nakamura & Marc Suhrcke & Daniel John Zizzo, 2017. "A triple test for behavioral economics models and public health policy," Theory and Decision, Springer, vol. 83(4), pages 513-533, December.
    8. Sanjib Saha & Jonas Nordstrom & Ulf-G Gerdtham & Irene Mattisson & Peter M Nilsson & Peter Scarborough, 2019. "Prevention of Cardiovascular Disease and Cancer Mortality by Achieving Healthy Dietary Goals for the Swedish Population: A Macro-Simulation Modelling Study," IJERPH, MDPI, vol. 16(5), pages 1-11, March.
    9. Gustavsen, Geir Wæhler & Rickertsen, Kyrre, 2013. "Adjusting VAT rates to promote healthier diets in Norway: A censored quantile regression approach," Food Policy, Elsevier, vol. 42(C), pages 88-95.
    10. Irz, Xavier & Leroy, Pascal & Réquillart, Vincent & Soler, Louis-Georges, 2015. "Economic assessment of nutritional recommendations," Journal of Health Economics, Elsevier, vol. 39(C), pages 188-210.
    11. Jonas Nordström & Linda Thunström, 2011. "Economic policies for healthier food intake: the impact on different household categories," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(2), pages 127-140, April.
    12. Darmon, N. & Lacroix, A. & Muller, L. & Ruffieux, B., 2011. "Experimental economics shows how food price policies may improve diet while increasing socioeconomic inequalities in nutrition," Working Papers 201104, Grenoble Applied Economics Laboratory (GAEL).
    13. S. Duvaleix-Tréguer & A. Hammoudi & L. Rouached & L.G. Soler, 2012. "Firms' responses to nutritional policies," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 39(5), pages 843-877, December.
    14. Nordström, Jonas & Thunström, Linda, 2009. "The Impact on Different Household Types of Economic Policies Designed to Increase the Fiber Intake from Grain Consumption," HUI Working Papers 22, HUI Research.
    15. Ehmke, Mariah D. & Willson, Tina M. & Schroeter, Christiane & Hart, Ann Marie & Coupal, Roger H., 2009. "Obesity Economics for the Western United States," Western Economics Forum, Western Agricultural Economics Association, vol. 8(2), pages 1-13.

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    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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