Project: Analyzing the Welfare and Nutritional Effects of Food Taxes Intended to Promote Healthful Eating Habits
Award Year: 2002
Amount of award, fiscal 2002: $25,000.00
Institution: University of California—Berkeley
Principal Investigator: Jeffrey Perloff
Status: Completed
Detailed Objective: This study will estimate the effects of proposed health-promoting food taxes and subsidies, including the relationship between prices of beverages and dairy products and the extent to which households purchase them. Some legislators have proposed taxing allegedly unhealthy food or subsidizing healthy foods so as to improve eating habits. Other legislation (e.g., for food stamps) provides an income subsidy that may encourage healthier diets. The effect of such taxes and subsidies depends on own-price, cross-price, and income elasticities of demand. This study will use scanner data from Information Resources, Inc. (IRI) for household purchases of beverages and dairy to estimate demand elasticities for soft drinks and dairy products. The information will be used to simulate the effects of new taxes and subsidies for various demographic groups of consumers. Using information from food nutrition databases, the study will also examine the likely changes in nutritional intake associated with food taxes and subsidies.
Topic: Food Prices and Demand
Dataset: IRI Infoscan data
Chouinard, H., D. Davis, J. LaFrance, J. Perloff. “Fat Taxes: Big Money for Small Change,” Forum for Health Economics & Policy, Vol. 10, Issue 2, June 2007.