Mandatory labels, taxes and market forces: An empirical evaluation of fat policies

Olivier Allais, Fabrice Etilé and Sébastien Lecocq

Journal of Health Economics, 2015, vol. 43, issue C, 27-44

Abstract: The public-health community views mandatory Front-of-Pack (FOP) nutrition labels and nutritional taxes as promising tools to control the growth of food-related chronic diseases. This paper uses household scanner data to propose an ex-ante evaluation and comparison of these two policy options for the fromage blanc and dessert yogurt market. In most markets, labelling is voluntary and firms display fat labels only on the FOP of low-fat products to target consumers who do not want to eat fat. We here separately identify consumer preferences for fat and for FOP fat labels by exploiting an exogenous difference in legal labelling requirements between these two product categories. Estimates of demand curves are combined with a supply model of oligopolistic price competition to simulate policies. We find that a feasible ad valorem fat tax dominates a mandatory FOP-label policy from an economic perspective, but both are equally effective in reducing average fat purchases.

Keywords: Mandatory fat-content label; Ad valorem tax; Quasi-natural experiment; Firm strategic pricing; Differentiated products (search for similar items in EconPapers)
JEL-codes: H32 I18 L13 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Related works:
Working Paper: Mandatory labels, taxes and market forces: An empirical evaluation of fat policies (2015)
Working Paper: Mandatory labels, taxes and market forces: An empirical evaluation of fat policies (2015)
Working Paper: Mandatory Labels, taxes and market forces: An empirical evaluation of fat policies (2013)
Working Paper: Mandatory labels, taxes and market forces: An empirical evaluation of fat policies (2012)
Working Paper: Mandatory labels, taxes and market forces: An empirical evaluation of fat policies (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:43:y:2015:i:c:p:27-44

DOI: 10.1016/j.jhealeco.2015.06.003

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