Obesity incurs substantial costs to individuals and to society. Fat tax is one of the policies that aim to prevent and manage obesity. This paper empirically examines effects of increased price on unhealthy food (fat tax). I focus on estimating price elasticity of soft drinks, which have been linked to obesity in many developed countries.
First, I look at effects of soda price on its own consumption, consumption of other beverages, and overweight status, using Korean National Health and Nutrition Examination Survey (KNHANES). Korea had been imposing 10% of special consumption tax on soft drinks, but repealed it at the end of 1999. Therefore, price variations are obtained from this tax repeal and consumption changes between 1998 and 2001 are compared. Applying OLS regressions, Tobit model, and two-part models, I find that price elasticity of soft drinks is -0.34. Although increased soda price reduces its consumption, consumption of other beverage (milk) increases, so overweight prevalence does not change. (The rest omitted)
- 건강유해식품에 대한 가격정책의 효과(Effects of fat tax on unhealthy food)
건강유해식품에 대한 가격정책의 효과(Effects of fat tax on unhealthy food)
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Economic Administration
Social Development < Health