The Effects of a Fat Tax on Dairy Products

We apply an incomplete demand system to supermarket scanner data to estimate the effects of a fat tax on dairy products for different demographic groups. We find own-price elasticities of demand are relatively inelastic and vary little across groups. A fat tax may be an effective means to raise revenue, but will not result in a significant reduction in fat consumption. The welfare effects associated with a fat tax are large and vary greatly across demographic groups. These fat taxes are regressive in nature, as the elderly and poor suffer greater welfare losses.


Issue Date:
2005
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/25078
Total Pages:
42
JEL Codes:
H2; I18
Series Statement:
CUDARE Working Paper 1007




 Record created 2017-04-01, last modified 2017-08-22

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)