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Taxing Snack Foods: Manipulating Diet Quality Or Financing Information Programs?

Posted: 19 Jan 2006  

Fred Kuchler

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Abebayehu Tegene

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

J. Michael Harris

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Abstract

This paper investigates consumers' likely response to a proposed tax on snack foods that addresses public health issues generated by rising U.S. obesity rates. We estimate demands for particular snack foods and show they are price inelastic after accounting for quality variation. We calculate impacts of a range of ad valorem taxes on the demand for salty snack food. The impacts on dietary quality are small, and negligible at the lower tax rates. If taxes were earmarked for funding information programs, as several proponents suggest, taxes would generate a revenue stream the public health community could use for nutrition education.

Suggested Citation

Kuchler, Fred and Tegene, Abebayehu and Harris, J. Michael, Taxing Snack Foods: Manipulating Diet Quality Or Financing Information Programs?. Review of Agricultural Economics, Vol. 27, No. 1, pp. 4-20, Spring 2005. Available at SSRN: https://ssrn.com/abstract=876691 or http://dx.doi.org/10.1111/j.1467-9353.2004.00204.x

Fred Kuchler (Contact Author)

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States

Abebayehu Tegene

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States

James Harris

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States

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