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When Do Fat Taxes Increase Consumer Welfare?
MedLine Citation:
PMID:  21887810     Owner:  NLM     Status:  Publisher    
Abstract/OtherAbstract:
Previous analyses of fat taxes have generally worked within an empirical framework in which it is difficult to determine whether consumers benefit from the policy. This note outlines on simple means to determine whether consumers benefit from a fat tax by comparing the ratio of expenditures on the taxed good to the weight effect of the tax against the individual's willingness to pay for a one-pound weight reduction. Our empirical calculations suggest that an individual would have to be willing to pay about $1500 to reduce weight by one pound for a tax on sugary beverages to be welfare enhancing. The results suggest either that a soda tax is very unlikely to increase individual consumer welfare or that the policy must be justified on some other grounds that abandon standard rationality assumptions. Copyright © 2011 John Wiley & Sons, Ltd.
Authors:
Jayson L Lusk; Christiane Schroeter
Publication Detail:
Type:  JOURNAL ARTICLE     Date:  2011-9-2
Journal Detail:
Title:  Health economics     Volume:  -     ISSN:  1099-1050     ISO Abbreviation:  -     Publication Date:  2011 Sep 
Date Detail:
Created Date:  2011-9-2     Completed Date:  -     Revised Date:  -    
Medline Journal Info:
Nlm Unique ID:  9306780     Medline TA:  Health Econ     Country:  -    
Other Details:
Languages:  ENG     Pagination:  -     Citation Subset:  -    
Copyright Information:
Copyright © 2011 John Wiley & Sons, Ltd.
Affiliation:
Department of Agricultural Economics, Oklahoma State University, OK, USA.
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