Posted: 19 Jan 2006
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: 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