Journal Article

Taxing Snack Foods: Manipulating Diet Quality or Financing Information Programs?

Fred Kuchler, Abebayehu Tegene and J. Michael Harris

in Applied Economic Perspectives and Policy

Published on behalf of Agricultural and Applied Economics Association

Volume 27, issue 1, pages 4-20
Published in print January 2005 | ISSN: 2040-5790
Published online January 2005 | e-ISSN: 2040-5804 | DOI: https://dx.doi.org/10.1111/j.1467-9353.2004.00204.x
Taxing Snack Foods: Manipulating Diet Quality or Financing Information Programs?

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  • Manufacturing
  • Economics of Health
  • Fiscal Policies and Behaviour of Economic Agents
  • Taxation, Subsidies, and Revenue

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This paper investigates consumers' likely response to a proposed tax on snack foods that addresses public health issues generated by rising U.S. obesity rates. We estimate demands for particular snack foods and show they are price inelastic after accounting for quality variation. We calculate impacts of a range of ad valorem taxes on the demand for salty snack food. The impacts on dietary quality are small, and negligible at the lower tax rates. If taxes were earmarked for funding information programs, as several proponents suggest, taxes would generate a revenue stream the public health community could use for nutrition education.

Keywords: H250; H310; I120; I180; L660

Journal Article.  7275 words.  Illustrated.

Subjects: Manufacturing ; Economics of Health ; Fiscal Policies and Behaviour of Economic Agents ; Taxation, Subsidies, and Revenue

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