The Welfare Effects of Health-Based Food Tax Policy
This paper examines the effects of health-oriented food tax reforms on the distribution of tax payments, food demand and health outcomes. Unlike earlier work, we also take into account the uncertainty related to both demand estimation and health estimates and report the confidence intervals for the overall health effects instead of only point estimates. Taxation of sugar leads to a statistically significant reduction in both the incidence of type 2 diabetes and coronary heart disease. The health effects appear to be most pronounced for low-income individuals, and the reforms may therefore reduce health inequality. This effect undermines the traditional regressivity argument against the heavy taxation of unhealthy food.
|Date of creation:||Dec 2012|
|Date of revision:|
|Contact details of provider:|| Postal: Rehtorinpellonkatu 3, FIN-20500 TURKU|
Phone: +358 2 333 51
Web page: http://ace-economics.fi
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nordström, Jonas & Thunström, Linda, 2007.
"The Impact of Tax Reforms Designed to Encourage a Healthier Grain Consumption,"
Umeå Economic Studies
717, Umeå University, Department of Economics.
- 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.
- Nordström, Jonas & Thunström, Linda, 2007. "The Impact of Tax Reforms Designed to Encourage a Healthier Grain Consumption," HUI Working Papers 11, HUI Research.
- Finkelstein, Eric A. & Zhen, Chen & Bilger, Marcel & Nonnemaker, James & Farooqui, Assad M. & Todd, Jessica E., 2013. "Implications of a sugar-sweetened beverage (SSB) tax when substitutions to non-beverage items are considered," Journal of Health Economics, Elsevier, vol. 32(1), pages 219-239.
- Olivier Allais & Patrice Bertail & Véronique Nichèle, 2010. "The Effects of a Fat Tax on French Households' Purchases: A Nutritional Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(1), pages 228-245.
- 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.
- Nordström, Jonas & Thunström, Linda, 2010.
"Can targeted food taxes and subsidies improve the diet? Distributional effects among income groups,"
2010:11, Lund University, Department of Economics.
- 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.
- Nordström, Jonas & Thunström, Linda, 2011. "Can targeted food taxes and subsidies improve the diet? Distributional effects among income groups," HUI Working Papers 44, HUI Research.
- Ted O'Donoghue & Matthew Rabin, 2005.
"Optimal Sin Taxes,"
784828000000000346, UCLA Department of Economics.
- James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
- 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).
- Miljkovic, Dragan & Nganje, William & de Chastenet, Helene, 2008. "Economic factors affecting the increase in obesity in the United States: Differential response to price," Food Policy, Elsevier, vol. 33(1), pages 48-60, February.
- Gruber, Jonathan & Koszegi, Botond, 2004. "Tax incidence when individuals are time-inconsistent: the case of cigarette excise taxes," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1959-1987, August.
- Keen, Michael, 1986. "Zero Expenditures and the Estimation of Engel Curves," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(3), pages 277-86, July.
- Senarath Dharmasena & Oral Capps JR, 2012. "Intended and unintended consequences of a proposed national tax on sugar‐sweetened beverages to combat the U.S. obesity problem," Health Economics, John Wiley & Sons, Ltd., vol. 21(6), pages 669-694, 06.
- Irz, Xavier T., 2009.
"Modelling physical quantities of food and nutrients consumed from aggregate data – with an application to Finland,"
2009 Conference, August 16-22, 2009, Beijing, China
50324, International Association of Agricultural Economists.
- Xavier Irz, 2010. "Modeling physical quantities of food and nutrients consumed from aggregate data-with an application to Finland," Agricultural Economics, International Association of Agricultural Economists, vol. 41(3-4), pages 293-304, 05.
- Geir Wæhler Gustavsen & Kyrre Rickertsen, 2009. "The effects of taxes on purchases of sugar-sweetened carbonated soft drinks: a quantile regression approach," Applied Economics, Taylor & Francis Journals, vol. 43(6), pages 707-716.
- 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.
- Dragan Miljkovic & William Nganje, 2008. "Regional obesity determinants in the United States: a model of myopic addictive behavior in food consumption," Agricultural Economics, International Association of Agricultural Economists, vol. 38(3), pages 375-384, 05.
- 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.
- Fletcher, Jason M. & Frisvold, David E. & Tefft, Nathan, 2010.
"The effects of soft drink taxes on child and adolescent consumption and weight outcomes,"
Journal of Public Economics,
Elsevier, vol. 94(11-12), pages 967-974, December.
- Jason Fletcher & David Frisvold & Nathan Tefft, 2009. "The Effects of Soft Drink Taxes on Child and Adolescent Consumption and Weight Outcomes," Emory Economics 0908, Department of Economics, Emory University (Atlanta).
- 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.
- Kotakorpi, Kaisa, 2008. "The incidence of sin taxes," Economics Letters, Elsevier, vol. 98(1), pages 95-99, January.
- 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.
- Blundell, Richard & Pashardes, Panos & Weber, Guglielmo, 1993. "What Do We Learn About Consumer Demand Patterns from Micro Data?," American Economic Review, American Economic Association, vol. 83(3), pages 570-97, June.
- Giorgio Brunello & Pierre-Carl Michaud & Anna Sanz-de-Galdeano, 2009. "The rise of obesity in Europe: an economic perspective," Economic Policy, CEPR;CES;MSH, vol. 24, pages 551-596, 07.
- Deaton, Angus & Irish, Margaret, 1984. "Statistical models for zero expenditures in household budgets," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 59-80.
- Deaton, Angus, 1987. "Estimation of own- and cross-price elasticities from household survey data," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 7-30.
When requesting a correction, please mention this item's handle: RePEc:tkk:dpaper:dp81. 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: (Aleksandra Maslowska)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.