The Effect of Prices on Nutrition: Comparing the Impact of Product- and Nutrient-Specific Taxes / Matthew Harding, Michael Lovenheim.

Format:

Book

Author/Creator:

Harding, Matthew.

Contributor:

National Bureau of Economic Research.

Lovenheim, Michael.

Series:

Working Paper Series (National Bureau of Economic Research) no. w19781.

NBER working paper series no. w19781

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Effect of Prices on Nutrition

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

This paper provides an analysis of the role of prices in determining food purchases and nutrition using very detailed transaction-level observations for a large, nationally-representative sample of US consumers over the period 2002-2007. Using product- specific nutritional information, we develop a new method of partitioning the product space into relevant nutritional clusters that define a set of nutritionally-bundled goods, which parsimoniously characterize consumer choice sets. We then estimate a large utility-derived demand system over this joint product-nutrient space that allows us to calculate price and expenditure elasticities. Using our structural demand estimates, we simulate the role of product taxes on soda, sugar-sweetened beverages, packaged meals, and snacks, and nutrient taxes on fat, salt, and sugar. We find that a 20% nutrient tax has a significantly larger impact on nutrition than an equivalent product tax, due to the fact that these are broader-based taxes. However, the costs of these taxes in terms of consumer utility are not higher. A sugar tax in particular is a powerful tool to induce healthier nutritive bundles among consumers.

Notes:

Print version record

January 2014.