IDEAS home Printed from https://ideas.repec.org/p/isu/genstf/201207010700001121.html
   My bibliography  Save this paper

Taxing sweets: sweetener input tax or final consumption tax?

Author

Listed:
  • Miao, Zhen
  • Beghin, John C.
  • Jensen, Helen H.

Abstract

Policymakers are considering various policies to reduce obesity and its associated costs, including consumption taxes on high-calorie foods and specifically sweetened foods. We investigate two tax policies to reduce added sweetener consumption: a consumption tax on sweetened goods and a sweetener input tax. Both tax instruments can reach the same policy target of reducing added sweetener consumption and are found to be regressive. The tax on sweetener inputs targets sweeteners directly and leads to a loss in consumer surplus that is only one-fifth of that caused by the final consumption tax. Previous analyses have overlooked this important point.

Suggested Citation

  • Miao, Zhen & Beghin, John C. & Jensen, Helen H., 2012. "Taxing sweets: sweetener input tax or final consumption tax?," ISU General Staff Papers 201207010700001121, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201207010700001121
    as

    Download full text from publisher

    File URL: https://dr.lib.iastate.edu/server/api/core/bitstreams/9f89ad27-3be8-47e9-b5cf-0958cafde8e7/content
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Josef Schmidhuber, 2004. "The Growing Global Obesity Problem: Some Policy Options to Address It," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 1(2), pages 272-290.
    2. Matthew Rabin & Ted O'Donoghue, 1999. "Doing It Now or Later," American Economic Review, American Economic Association, vol. 89(1), pages 103-124, March.
    3. Hayley H. Chouinard & David E. Davis & Jeffrey T. LaFrance & Jeffrey M. Perloff, 2010. "Milk Marketing Order Winners and Losers," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(1), pages 59-76.
    4. Daniel A. Sumner & Michael K. Wohlgenant, 1985. "Effects of an Increase in the Federal Excise Tax on Cigarettes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(2), pages 235-242.
    5. Schroeter, Christiane & Lusk, Jayson & Tyner, Wallace, 2008. "Determining the impact of food price and income changes on body weight," Journal of Health Economics, Elsevier, vol. 27(1), pages 45-68, January.
    6. John Beghin & Jean-Christophe Bureau & Sophie Drogue, 2004. "Calibration of incomplete demand systems in quantitative analysis," Applied Economics, Taylor & Francis Journals, vol. 36(8), pages 839-847.
    7. Timothy J. Richards & Paul M. Patterson & Abebayehu Tegene, 2007. "Obesity And Nutrient Consumption: A Rational Addiction?," Contemporary Economic Policy, Western Economic Association International, vol. 25(3), pages 309-324, July.
    8. Kuchler, Fred & Tegene, Abebayehu & Harris, James Michael, 2004. "Taxing Snack Foods: What to Expect for Diet and Tax Revenues," Agricultural Information Bulletins 33607, United States Department of Agriculture, Economic Research Service.
    9. Beghin, John C. & Jensen, Helen H., 2008. "Farm policies and added sugars in US diets," Food Policy, Elsevier, vol. 33(6), pages 480-488, December.
    10. Emi Nakamura, 2008. "Pass-Through in Retail and Wholesale," American Economic Review, American Economic Association, vol. 98(2), pages 430-437, May.
    11. Joseph A. Atwood & Glenn A. Helmers, 1998. "Examining Quantity and Quality Effects of Restricting Nitrogen Applications to Feedgrains," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(2), pages 369-381.
    12. Cash, Sean B. & Sunding, David L. & Zilberman, David, 2004. "Fat Taxes And Thin Subsidies: Prices, Diet, And Health Outcomes," 2004 Annual meeting, August 1-4, Denver, CO 19961, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Chouinard Hayley H & Davis David E & LaFrance Jeffrey T & Perloff Jeffrey M, 2007. "Fat Taxes: Big Money for Small Change," Forum for Health Economics & Policy, De Gruyter, vol. 10(2), pages 1-30, June.
    14. Gustavsen, Geir Waehler, 2005. "Public Policies and the Demand for Carbonated Soft Drinks: A Censored Quantile Regression Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24737, European Association of Agricultural Economists.
    15. Farah, Hodan A. & Buzby, Jean C., 2005. "U.S. Food Consumption Up 16 Percent Since 1970," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-2, November.
    16. Barry K. Goodwin & Gary W. Brester, 1995. "Structural Change in Factor Demand Relationships in the U.S. Food and Kindred Products Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 69-79.
    17. Schroeter, Christiane & Lusk, Jayson L., 2007. "The Impact Of Economic Factors On Consumer Health," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 7364, Western Agricultural Economics Association.
    18. Smed, Sinne & Jensen, Jorgen D. & Denver, Sigrid, 2007. "Socio-economic characteristics and the effect of taxation as a health policy instrument," Food Policy, Elsevier, vol. 32(5-6), pages 624-639.
    19. Boizot-Szantai, Christine & Etile, Fabrice, 2005. "The Food Prices / Body Mass Index Relationship: Theory and Evidence from a Sample of French Adults," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24734, European Association of Agricultural Economists.
    20. John D. Mullen & Michael K. Wohlgenant & Donald E. Farris, 1988. "Input Substitution and the Distribution of Surplus Gains from Lower U.S. Beef-Processing Costs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(2), pages 245-254.
    21. Hayley H. Chouinard & David E. Davis & Jeffrey T. LaFrance & Jeffrey M. Perloff, 2010. "Milk Marketing Order Winners and Losers," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(1), pages 59-76.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. John C. Beghin & Amani Elobeid, 2015. "The Impact of the U.S. Sugar Program Redux," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 37(1), pages 1-33.
    2. John C. Beghin & Amani Elobeid, 2015. "The Impact of the U.S. Sugar Program Redux," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 37(1), pages 1-33.
    3. Zhen Miao & John C. Beghin & Helen H. Jensen, 2013. "Accounting For Product Substitution In The Analysis Of Food Taxes Targeting Obesity," Health Economics, John Wiley & Sons, Ltd., vol. 22(11), pages 1318-1343, November.
    4. Abigail M. Okrent & Julian M. Alston, 2012. "The Effects of Farm Commodity and Retail Food Policies on Obesity and Economic Welfare in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(3), pages 611-646.
    5. Riera-Crichton, Daniel & Tefft, Nathan, 2014. "Macronutrients and obesity: Revisiting the calories in, calories out framework," Economics & Human Biology, Elsevier, vol. 14(C), pages 33-49.
    6. Vardges Hovhannisyan & Christopher T. Bastian, 2023. "New insights into the structure of consumer preferences for natural and artificial sweeteners," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(5), pages 1491-1515, October.
    7. Balagtas, Joseph V. & Nuno-Ledesma, Jose G. & Wu, Steven Y., 2016. "Effects of “Fat Taxes” on Package Sizes, and Welfare Distribution," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 252704, Agricultural and Applied Economics Association.
    8. Bonnet, Céline & Réquillart, Vincent, 2011. "Strategic Pricing and Health Price Policies," IDEI Working Papers 671, Institut d'Économie Industrielle (IDEI), Toulouse, revised Jul 2012.
    9. A. Malek Hammami & John C. Beghin, 2021. "The trade and welfare impacts of the U.S. retaliatory tariff on EU olive oil," Agricultural Economics, International Association of Agricultural Economists, vol. 52(5), pages 807-818, September.
    10. Bonnet, Céline & Réquillart, Vincent, 2013. "Tax incidence with strategic firms in the soft drink market," Journal of Public Economics, Elsevier, vol. 106(C), pages 77-88.
    11. Lionel Cosnard, 2019. "Taxing Sugar and Sugary Products to Reduce Obesity: A CGE Assessment of Several Tax Policies," Post-Print hal-03148821, HAL.
    12. Cosnard, Lionel & Laborde, David, 2019. "Taxing Sugar and Sugary Products to Reduce Obesity: A CGE Assessment of Several Tax Policies," Conference papers 333067, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    13. Lakkakula, Prithviraj & Schmitz, Andrew & Ripplinger, David, 2016. "U.S. Sweetener Demand Analysis: A QUAIDS Model Application," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-16, September.
    14. Petra Salamon & Martin Banse & Jesus Barreiro Hurle & Ondrej Chaloupka & Trevor Donnellan & Emil Erjavec & Thomas Fellmann & Kevin Hanrahan & Marlen Hass & Roel Jongeneel & Verena Laquai & Myrna van L, 2017. "Unveiling diversity in agricultural markets projections: from EU to Member States. A medium-term outlook with the AGMEMOD model," JRC Research Reports JRC109115, Joint Research Centre.
    15. Chen, Xiu & Kaiser, Harry M. & Rickard, Bradley J., 2015. "The impacts of inclusive and exclusive taxes on healthy eating: An experimental study," Food Policy, Elsevier, vol. 56(C), pages 13-24.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cash, Sean B. & Lacanilao, Ryan D., 2007. "Taxing Food to Improve Health: Economic Evidence and Arguments," Agricultural and Resource Economics Review, Cambridge University Press, vol. 36(2), pages 174-182, October.
    2. Zhen Miao & John C. Beghin & Helen H. Jensen, 2013. "Accounting For Product Substitution In The Analysis Of Food Taxes Targeting Obesity," Health Economics, John Wiley & Sons, Ltd., vol. 22(11), pages 1318-1343, November.
    3. Lionel Cosnard, 2019. "Taxing Sugar and Sugary Products to Reduce Obesity: A CGE Assessment of Several Tax Policies," Post-Print hal-03148821, HAL.
    4. Abigail M. Okrent & Julian M. Alston, 2012. "The Effects of Farm Commodity and Retail Food Policies on Obesity and Economic Welfare in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(3), pages 611-646.
    5. Cash, Sean B. & Lacanilao, Ryan D. & Adamowicz, Wiktor L. & Raine, Kim, 2008. "An Experimental Investigation of the Impact of Fat Taxes: Prices Effects, Food Stigma, and Information Effects on Economics Instruments to Improve Dietary Health," Consumer and Market Demand Network Papers 45499, University of Alberta, Department of Resource Economics and Environmental Sociology.
    6. Cosnard, Lionel & Laborde, David, 2019. "Taxing Sugar and Sugary Products to Reduce Obesity: A CGE Assessment of Several Tax Policies," Conference papers 333067, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Liaukonyte, Jura & Rickard, Bradley J. & Kaiser, Harry M. & Richards, Timothy J., 2010. "Evaluating advertising strategies for fruits and vegetables and the implications for obesity in the United States," Working Papers 126972, Cornell University, Department of Applied Economics and Management.
    8. Bonnet, Céline & Réquillart, Vincent, 2013. "Tax incidence with strategic firms in the soft drink market," Journal of Public Economics, Elsevier, vol. 106(C), pages 77-88.
    9. Bonnet, Céline & Réquillart, Vincent, 2011. "Strategic Pricing and Health Price Policies," IDEI Working Papers 671, Institut d'Économie Industrielle (IDEI), Toulouse, revised Jul 2012.
    10. Alston, Julian M. & Sumner, Daniel A. & Vosti, Stephen A., 2008. "Farm subsidies and obesity in the United States: National evidence and international comparisons," Food Policy, Elsevier, vol. 33(6), pages 470-479, December.
    11. 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.
    12. Alston, Julian M. & Mullally, Conner C. & Sumner, Daniel A. & Townsend, Marilyn & Vosti, Stephen A., 2009. "Likely effects on obesity from proposed changes to the US food stamp program," Food Policy, Elsevier, vol. 34(2), pages 176-184, April.
    13. Nordström, Jonas & Thunström, Linda, 2009. "The impact of tax reforms designed to encourage healthier grain consumption," Journal of Health Economics, Elsevier, vol. 28(3), pages 622-634, May.
    14. Staudigel, Matthias, 2011. "How (much) do food prices contribute to obesity in Russia?," Economics & Human Biology, Elsevier, vol. 9(2), pages 133-147, March.
    15. Céline Bonnet & Vincent Requillart, 2011. "Does the EU sugar policy reform increase added sugar consumption? An empirical evidence on the soft drink market," Health Economics, John Wiley & Sons, Ltd., vol. 20(9), pages 1012-1024, September.
    16. 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).
    17. Linda Thunström, 2019. "Welfare effects of nudges: The emotional tax of calorie menu labeling," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 14(1), pages 11-25, January.
    18. Matthias Staudigel, 2012. "How do obese people afford to be obese? Consumption strategies of Russian households," Agricultural Economics, International Association of Agricultural Economists, vol. 43(6), pages 701-714, November.
    19. 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.
    20. Jayson L. Lusk & Christiane Schroeter, 2012. "When Do Fat Taxes Increase Consumer Welfare?," Health Economics, John Wiley & Sons, Ltd., vol. 21(11), pages 1367-1374, November.

    More about this item

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

    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:isu:genstf:201207010700001121. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.