Will a Fat Tax Work?
Obesity has reached epidemic proportions in the US, with two-third of adults and one in three children overweight or obese. Of the many proposals to reverse the obesity epidemic, the most contentious is the use of price-based interventions such as the “fat tax”.
Previous investigations of the efficacy of such initiatives in altering consumption behavior have yielded contradictory findings. This article provides strong evidence that a selective taxation mechanism that lowers the relative prices of healthier options–such that those price changes alter shelf prices at the point of purchase–offers an effective health policy tool in the efforts to control obesity.
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