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Obesity and smoking: can we catch two birds with one tax?

  • Davide Dragone

    ()

    (University of Bologna)

  • Francesco Manaresi

    ()

    (Bank of Italy)

  • Luca Savorelli

    ()

    (University of St. Andrews)

The debate on tobacco and fat taxes often treats smoking and eating as independent behaviors. However, the available evidence shows that they are interdependent, which implies that policies against smoking or obesity may have larger scope than expected. To address this issue, we propose a dynamic rational model where eating and smoking are simultaneous choices that jointly affect body weight and addiction to smoking. Focusing on direct and cross-price effects, we compare tobacco taxes and food taxes and we show that a single policy tool can reduce both smoking and body weight. In particular, food taxes can be more effective than tobacco taxes at simultaneously fighting obesity and smoking.

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File URL: http://www.st-andrews.ac.uk/economics/repecfiles/4/1306.pdf
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Paper provided by Department of Economics, University of St. Andrews in its series Discussion Paper Series, Department of Economics with number 201306.

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Date of creation: 19 Jul 2013
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Handle: RePEc:san:wpecon:1306
Contact details of provider: Postal: School of Economics and Finance, University of St. Andrews, Fife KY16 9AL
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