Taxes on Unhealthy Food and Externalities in the Parental Choice of Children's Diet

Zarko Kalamov and Marco Runkel ()

No 7837, CESifo Working Paper Series from CESifo

Abstract: This paper addresses the question whether taxes on unhealthy food are suitable for internalizing intergenerational externalities inflicted by parents when they decide on their children’s diet. Within an OLG model with an imperfectly altruistic parent, the optimal steady state tax rate on unhealthy food is strictly positive. However, it is only second best since it not only reduces food consumption of the child but also distorts the parent's food consumption. Surprisingly, the optimal tax may under- or overinternalize the marginal damage.

Keywords: obesity; fat tax; altruism (search for similar items in EconPapers)
JEL-codes: D11 D62 H21 I12 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-hea, nep-pbe and nep-pub
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Related works:
Journal Article: Taxes on unhealthy food and externalities in the parental choice of children's diet (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7837

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