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The Effects of a Fat Tax on French Households' Purchases: A Nutritional Approach
Author(s) -
Allais Olivier,
Bertail Patrice,
Nichèle Véronique
Publication year - 2010
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aap004
Subject(s) - economics , revenue , tax revenue , nutrient , estimation , agricultural economics , econometrics , public economics , biology , ecology , accounting , management
Abstract This article assesses the effects of a “fat tax” on the nutrients purchased by French households across different income groups. This is done by making a preliminary estimation of price elasticities using a complete demand system on household scanner data, and by calculating nutrient elasticities using estimated price elasticities. We find that a fat tax has small and ambiguous effects on nutrients purchased by French households, and a slight effect on body weight in the short run, with a greater effect in the long run. Such a tax generates substantial tax revenue, but is highly regressive.