Working Paper: NBER ID: w15096
Authors: Dana Goldman; Darius Lakdawalla; Yuhui Zheng
Abstract: A popular policy option for addressing the growth in weight has has been the imposition of a "fat tax" on selected foods that are deemed to promote obesity. Understanding the public economics of "fat taxes" requires an understanding of how or even whether individuals respond to changes in food prices over the long-term. We study the short- and long-run body weight consequences of changing food prices, in the Health and Retirement Study (HRS). We found very modest short-term effects of price per calorie on body weight, and the magnitudes align with the previous literature. The long-term effect is much bigger, but it takes a long time for the effect to reach the full scale. Within 30 years, a 10% permanent reduction in price per calorie would lead to a BMI increase of 1.5 units (or 3.6%). The long term effect is an increase of 1.9 units of BMI (or 4.2%). From a policy perspective, these results suggest that policies raising the price of calories will have little effect on weight in the short term, but might curb the rate of weight growth and achieve weight reduction over a very long period of time.
Keywords: Food Prices; Body Weight; Fat Tax; Obesity; Public Economics
JEL Codes: I1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| price per calorie (D41) | BMI (I12) |
| 10% permanent reduction in price per calorie (D41) | BMI (I12) |
| price per calorie (D41) | body weight (I14) |
| obesity status (I14) | responsiveness to price changes (D41) |
| household wealth (D14) | responsiveness to price changes (D41) |