Taxes on unhealthy food and externalities in the parental choice of children's diet.

Abstract:

:This study examines whether taxes on unhealthy food are suitable for internalizing intergenerational externalities inflicted by parents when they decide on their children's diet. In an overlapping generations (OLG) model with an imperfectly altruistic parent, the optimal steady-state tax rate on unhealthy food is strictly positive. However, it is only second-best because, in addition to reducing unhealthy consumption by the child, it distorts the parent's unhealthy consumption. Surprisingly, the optimal tax may underinternalize or overinternalize the marginal damage.

journal_name

Health Econ

journal_title

Health economics

authors

Kalamov Z,Runkel M

doi

10.1002/hec.4024

subject

Has Abstract

pub_date

2020-08-01 00:00:00

pages

938-944

issue

8

eissn

1057-9230

issn

1099-1050

journal_volume

29

pub_type

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