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

Olivier Allais (), Fabrice Etilé and Sébastien Lecocq
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Olivier Allais: ALISS - Alimentation et sciences sociales - INRA - Institut National de la Recherche Agronomique

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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: Differentiated products; Mandatory fat-content label; Ad valorem tax; Quasi-natural experiment; Firm strategic pricing (search for similar items in EconPapers)
Date: 2015
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01213319v1
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Citations: View citations in EconPapers (14)

Published in Journal of Health Economics, 2015, 43, pp.27-44. ⟨10.1016/j.jhealeco.2015.06.003⟩

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Related works:
Journal Article: 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:hal:pseptp:halshs-01213319

DOI: 10.1016/j.jhealeco.2015.06.003

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