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A reconsideration of the sugar sweetened beverage tax in a household production model

Di Xiang, Lue Zhan and Massimo Bordignon ()

Food Policy, 2020, vol. 95, issue C

Abstract: We study the impact of a hypothetical tax on sugar - sweetened beverages (SSBs) on the U.S. households’ nutrients purchase, welfare change, and health benefit. Differently from the traditional approach, Food at Home (FAH) is here defined as a “home” good instead of a market good and consumers’ demands derived under the assumption that households maximize utility subject to both a money and a time constraint. The model is estimated by using an incomplete approximate Exact Affine Stone Index (EASI) demand system on a data set built by merging the U.S. consumer expenditure and time use surveys. Results show that a SSB tax would be much more effective in decreasing household nutrients purchase than it would appear by estimating a model neglecting time costs in home food production, due to a lesser compensation of calories from increasing FAH consumption. A tax-induced 38% increase in SSB price is predicted to decrease the per capita energy purchase by 41 kcal/day.

Keywords: Sugar-sweetened beverage tax; Obesity; Household production (search for similar items in EconPapers)
JEL-codes: D12 D13 I18 (search for similar items in EconPapers)
Date: 2020
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Working Paper: A Reconsideration of the Sugar Sweetened Beverage Tax in a Household Production Model (2018) Downloads
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DOI: 10.1016/j.foodpol.2020.101933

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