HEALTH AND DISTRIBUTIONAL EFFECTS OF DIFFERENTIATED FOOD TAXATION
Friday 26 August 2011, 15:00 - 17:45
Quick Links: Programme Overview • Contributed Session 3 • Health and Mortality
| Session: | Health and Mortality |
| Category: | ESEM |
| Chaired By: | Sarah Brown, University of Sheffield |
| When & Where: | Friday 26 August 2011, 15:00 - 17:45, 7 P.A. Munch, room 10 |
| Presented By: | Jukka Pirttilä, University of Tampere |
| Co-Author(s): | Kaisa Kotakorpi, University of Tampere, Ilpo Suoniemi, Labour Institute for Economic Research, Tommi Härkänen, National Institute for Health and Welfare, Heli Reinivuo, National Institute for Health and Welfare and Pirjo Pietinen, National Institute for Health and Welfare |
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This paper uses Finnish consumption data to examine the welfare effects of health-oriented food tax reforms. We estimate a complete demand system for food and simulate the health consequences of tax changes. A sugar tax of 1 € / kg reduces obesity considerably, the incidence of type 2 diabetes by 6% and coronary heart disease by 1.5%. Reduced VAT rates for fresh fish, fruit and vegetables reduce the incidence of coronary heart disease. The health effects are most pronounced for low-income individuals, undermining the traditional regressivity argument against taxation of unhealthy food.
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