Fat Taxes: Big Money for Small Change
-
Hayley H Chouinard
In an attempt to improve the nation's health, many U.S. policy makers have or are considering imposing taxes on the fat in food. Dairy products constitute a large portion of at home fat consumption of particularly harmful types of fat, and nearly all U.S. households consume these products. We estimate a demand system for dairy products, which we use to simulate substitution effects among dairy products and the welfare impacts of fat taxes on various consumer groups. We find that even a 10 percent ad valorem tax on the percentage of fat would reduce fat consumption by less than a percentage point. Given that the demand for most dairy products is inelastic, a fat tax is an effective means to raise revenue. However, these fat taxes are unattractive because they are extremely regressive, and the elderly and poor suffer much greater welfare losses from the taxes than do younger and richer consumers.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Articles in the same Issue
- Article
- Aging and Future Healthcare Expenditure: A Consistent Approach
- Fat Taxes: Big Money for Small Change
- The Effect of State Cost Containment Strategies on the Insurance Status and Use of Antiretroviral Therapy (HAART) for HIV Infected People
- Substitution, Spending Offsets, and Prescription Drug Benefit Design
- Risky Sexual Behavior, Testing, and HIV Treatments
- Current and Future Prevalence of Obesity and Severe Obesity in the United States
- Willingness to Pay for Antiretroviral Therapy for HIV Positive Individuals in India
- Cross-Country Variation in Obesity Patterns among Older Americans and Europeans
Articles in the same Issue
- Article
- Aging and Future Healthcare Expenditure: A Consistent Approach
- Fat Taxes: Big Money for Small Change
- The Effect of State Cost Containment Strategies on the Insurance Status and Use of Antiretroviral Therapy (HAART) for HIV Infected People
- Substitution, Spending Offsets, and Prescription Drug Benefit Design
- Risky Sexual Behavior, Testing, and HIV Treatments
- Current and Future Prevalence of Obesity and Severe Obesity in the United States
- Willingness to Pay for Antiretroviral Therapy for HIV Positive Individuals in India
- Cross-Country Variation in Obesity Patterns among Older Americans and Europeans
