Arbeitspapier

Paternalistic Taxation of Unhealthy Food and the Intensive versus Extensive Margin of Obesity

This paper shows that if an individual’s health costs are U-shaped in weight with a minimum at some healthy weight level and if the individual has both self control problems and rational motives for over- or underweight, the optimal paternalistic tax on unhealthy food mitigates the individual’s weight problem (intensive margin), but does not induce the individual to choose healthy weight (extensive margin). Implementing healthy weight requires a further distortion (e.g. subsidy on other goods), which may render the tax on unhealthy food inferior to the option of not taxing the individual at all. In addition, with heterogeneous individuals the optimal uniform paternalistic tax may have the negative side effect of rendering otherwise healthy individuals underweight.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 6911

Classification
Wirtschaft
Consumer Economics: Theory
Taxation and Subsidies: Efficiency; Optimal Taxation
Health: Government Policy; Regulation; Public Health
Subject
sin tax
paternalism
obesity
extensive versus intensive margin

Event
Geistige Schöpfung
(who)
Kalamov, Zarko
Runkel, Marco
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2018

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Arbeitspapier

Associated

  • Kalamov, Zarko
  • Runkel, Marco
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2018

Other Objects (12)