The Effects of a Fat Tax on Dairy Products

Hayley Chouinard, David E. Davis (), Jeffrey Thomas LaFrance () and Jeffrey Perloff
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Hayley Chouinard: Washington State University

No 1007, Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley

Abstract: We apply an incomplete demand system to supermarket scanner data to estimate the effects of a fat tax on dairy products for different demographic groups. We find own-price elasticities of demand are relatively inelastic and vary little across groups. A fat tax may be an effective means to raise revenue, but will not result in a significant reduction in fat consumption. The welfare effects associated with a fat tax are large and vary greatly across demographic groups. These fat taxes are regressive in nature, as the elderly and poor suffer greater welfare losses.

Keywords: fat tax; incomplete demand system (search for similar items in EconPapers)
Date: Written
Note: oai:cdlib1:are_ucb-1099
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