Unhealthy food, regulations, and consumer welfare: The US microwaveable popcorn market

Christoph Bauner, Debi Prasad Mohapatra, Nadia Streletskaya and Emily Wang

Economic Inquiry, 2024, vol. 62, issue 4, 1558-1578

Abstract: Due to significant health concerns, governments across the world have taken measures to regulate dietary trans fat, for example, through bans and ad‐valorem taxes. We assess the effectiveness of these two strategies and measure their ensuing welfare implications. We estimate a structural demand and supply model for the microwavable popcorn market using NielsenIQ Homescan data. Applying the recovered consumer preferences and marginal costs, we find a ban and a 35% tax result in similar levels of welfare loss and trans fat reduction. A 10% tax can still significantly reduce trans fat consumption (around 48%), while the associated consumer welfare loss is substantially smaller.

Date: 2024
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https://doi.org/10.1111/ecin.13240

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