A theoretical analysis of rational diet of healthy and junk foods

Amnon Levy

Economics Working Papers from School of Economics, University of Wollongong, NSW, Australia

Abstract: Junk-food consumption, health and productivity are analysed within an expectedlifetime- utility-maximising framework in which longevity and productivity rise with health, and health deteriorates with the consumption of junk food. As long as the junk food’s relative taste-price differential is positive, rational diets deviate from the physiologically optimal ones and generate lower than maximal levels of health and productivity. Taxing junk food can eliminate this discrepancy, but the outcome is not Pareto-superior. The value of health and the steady-state levels of rational junk-food consumption, health and productivity depend on the consumer’s tastes, prices, endurance, appetite and time preferences.

Keywords: Taste; Price; Endurance; Appetite; Time-preferences (search for similar items in EconPapers)
JEL-codes: D91 I12 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2007
New Economics Papers: this item is included in nep-agr and nep-hea
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