Scandinavian Working Papers in Economics
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Department of Economics, Umeň University Umeň Economic Studies, Department of Economics, Umeň University

No 662:
Optimal Paternalism: Sin Taxes and Health Subsidies

Thomas Aronsson () and Linda Thunstr÷m ()

Abstract: The starting point for this paper is the potential self-control problem underlying the consumption of unhealthy food. The purpose is to analyze public policies, which are designed to correct for the welfare loss associated with such behavior. Contrary to previous studies, our analysis suggests that subsidies on wealth and health capital are part of the policy package, which can be used to implement a socially optimal resource allocation.

Keywords: Health; Quasi-Hyperbolic Discounting; Taxes; Subsidies; (follow links to similar papers)

JEL-Codes: D61; D62; H21; I18; (follow links to similar papers)

15 pages, May 11, 2005

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