Umeå Economic Studies, Department of Economics, Umeå University
No 717:
The Impact of Tax Reforms Designed to Encourage a Healthier Grain Consumption
Jonas Nordström ()
and Linda Thunström ()
Abstract: In this paper, we simulate the effects of taxes on
products and/or nutrients aimed at encouraging a healthier grain
consumption. To carry out the analysis, we use a rich data set on household
consumption of grain products, combined with information about the
nutritional content of the products. We estimate behavioural parameters
that are used to simulate the impact on the average household of different
types of tax reforms; entailing either a subsidy on commodities
particularly rich in fibre or a subsidy of the fibre density in grain
products. Our results suggest that to direct the fibre intake of the
average household towards nutritional recommendations, reforms with a
substantial impact on consumer prices are required. Our results also imply
that subsidizing the fibre density is more cost-efficient than reducing the
VAT on commodities rich in fibre. Regardless of the type of subsidy
imposed, the increase in the fibre intake is accompanied by unwanted
increases in nutrients that are often over consumed; fat, saturated fat,
salt and sugar and added sugar. Funding the subsidies by taxing these
nutrients, or less healthy commodities, prevents such developments.
Keywords: Consumer economics; food; health; taxation; (follow links to similar papers)
JEL-Codes: D12; H23; I18; (follow links to similar papers)
44 pages, October 8, 2007
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- This paper is published as:
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Nordström, Jonas and Linda Thunström, (2009), 'The Impact of Tax Reforms Designed to Encourage a Healthier Grain Consumption', Journal of Health Economics, Vol. 28, pages 622-634
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