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Agricultural and Applied Economics Association (formerly the American Agricultural Economics Association) >
2010 Annual Meeting, July 25-27, 2010, Denver, Colorado >
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http://purl.umn.edu/61360
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| Title: | The Distributional Consequences of a Fiscal Food Policy: Evidence From the UK |
| Authors: | Salois, Matthew J.
Tiffin, J. Richard |
| Authors (Email): | Salois, Matthew J. (m.j.salois@reading.ac.uk)
Tiffin, Richard (j.r.tiffin@reading.ac.uk) |
| Keywords: | distributional characteristic
economic welfare
fat tax
indirect tax reform
obesity
thin subsidy |
| JEL Codes: | D30
D60
H20
I10
I30 |
| Issue Date: | 2010 |
| Series/Report no.: | Selected Paper
11428 |
| Abstract: | The extant literature on fat taxes and thin subsidies tends to focus on the overall effectiveness of such fiscal instruments in altering diets and improving health. However, little is known about the welfare impacts of fiscal food policies on society. This paper fills a gap in the literature by assessing the distributional impacts and welfare effects resulting from a tax-subsidy combination on different food groups. Using the methods derived from marginal tax reform theory, a formal welfare economics framework is developed allowing the calculation of the distributional characteristics of various food groups and approximate welfare
measures of prices changes caused by a tax-subsidy combination. The distributional characteristics reveal that many of the food groups targeted by a fat tax are consumed in greater concentration by low-income
households than higher-income households. The overall welfare effect of a fat tax in isolation is found to be negative. While the inclusion of a thin subsidy still results in welfare losses, the negative impact of the fat tax is mostly mitigated by the presence of the thin subsidy. Results suggest there is scope for the design of a fiscal food policy to combat obesity and poor dietary choice that is both revenue neutral and
welfare minimising. |
| URI: | http://purl.umn.edu/61360 |
| Institution/Association: | Agricultural and Applied Economics Association>2010 Annual Meeting, July 25-27, 2010, Denver, Colorado |
| Total Pages: | 27 |
| Collections: | 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado
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Files in This Item:
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| AAEA 2010 Final Paper.pdf | Main paper | 252Kb | PDF | View/Open |
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