The Welfare Effects of Health-based Food Tax Policy

Ilpo Suoniemi, Kaisa Kotakorpi, Tommi Härkänen, Pirjo Pietinen, Heli Reinivuo and Jukka Pirttilä

No 271, Working Papers from Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE

Abstract: This paper examines the effects of health-oriented food tax reforms on the distribution of tax payments, food demand and health outcomes. Unlike earlier work, we also take into account the uncertainty related to both demand estimation and health estimates and report the confidence intervals for the overall health effects instead of only point estimates. A sugar tax of 1 € / kg reduces the incidence of type 2 diabetes on average by 13% and it also leads to a reduction in coronary heart disease. The health effects appear to be most pronounced for low-income individuals, and the reforms may therefore reduce health inequality. This effect undermines the traditional regressivity argument against the heavy taxation of unhealthy food.

Keywords: Sin taxes; food taxation; tax incidence; commodity demand; obesity; diabetes; coronary heart disease; bootstrapping. (search for similar items in EconPapers)
Pages: 28 pages
Date: 2011-12-06
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Citations: View citations in EconPapers (1)

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https://labore.fi/wp-content/uploads/2011/12/Tyopapereita-271.pdf First version, 2011 (application/pdf)

Related works:
Journal Article: The welfare effects of health-based food tax policy (2014)
Working Paper: The Welfare Effects of Health-Based Food Tax Policy (2012)
Working Paper: The Welfare Effects of Health-based Food Tax Policy (2011)
Working Paper: The Welfare Effects of Health-based Food Tax Policy (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pst:wpaper:271

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