The Impact of Tax Reforms Designed to Encourage a Healthier Grain Consumption

No 717, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: In this paper, we simulate the effects of taxes on products and/or nutrients aimed at encouraging a healthier grain consumption. To carry out the analysis, we use a rich data set on household consumption of grain products, combined with information about the nutritional content of the products. We estimate behavioural parameters that are used to simulate the impact on the average household of different types of tax reforms; entailing either a subsidy on commodities particularly rich in fibre or a subsidy of the fibre density in grain products. Our results suggest that to direct the fibre intake of the average household towards nutritional recommendations, reforms with a substantial impact on consumer prices are required. Our results also imply that subsidizing the fibre density is more cost-efficient than reducing the VAT on commodities rich in fibre. Regardless of the type of subsidy imposed, the increase in the fibre intake is accompanied by unwanted increases in nutrients that are often over consumed; fat, saturated fat, salt and sugar and added sugar. Funding the subsidies by taxing these nutrients, or less healthy commodities, prevents such developments.

Keywords: Consumer economics; food; health; taxation (search for similar items in EconPapers)
JEL-codes: D12 H23 I18 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2007-10-08
New Economics Papers: this item is included in nep-agr
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Published in Journal of Health Economics, 2009, pages 622-634.

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Related works:
Journal Article: The impact of tax reforms designed to encourage healthier grain consumption (2009)
Working Paper: The Impact of Tax Reforms Designed to Encourage a Healthier Grain Consumption (2007)
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