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October 2014

Matt Harding

on 9 April 2015

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Transcript of NutritionDemand5

The Effect of Prices on Nutrition: Comparing the
Impact of Product- and Nutrient-Specific Taxes

Tax Simulations
Demand Estimates
Matthew Harding, Duke University
Michael Lovenheim, Cornell University

Data and Model
One of the largest public health concerns in the US
1970 14.5% --- 1990 22.5% --- today 36%
over 2/3 of adults are overweight, 17% of children are obese
more pronounced among lower income and among non-Asian minorities
cost to US medical system - $147 billion (2006)
2/3 of a household's caloric intake occurs at home

Why do households purchase foods with poor nutritional content at grocery stores?
big data
approach to modeling food purchases
Several proprietary databases - over 123 million transactions
UPC level nutrition label information
Rich demographics
Universe of US food selling establishments
Estimate large utility based demand model
Identify price and expenditure elasticities
Role of food purchasing environment and demographics
Comprehensive analysis of several types of food taxes
Product taxes: soda, SSB, packaged meals, snacks
Nutrient taxes: fat, sugar, salt
Overall the most detailed model of US food purchases so far
How do consumers interact with their environment?

proximity to supermarkets affect diet (Laraia, 2004)
urban consumers have fewer options and less healthy (Chung et. al., 2004; Block and Kouba, 2006)
minorities have fewer options (Powell et. al., 2007)
Food deserts
Purchasing environment
distinguish between supermarkets, grocery stores. convenience stores
count stores by type and distance
local food deserts
need more subtle ways to disentangle product quality
Simulating tax changes
Product taxes: 20% on soda, SSB, packaged meals, snacks
Nutrient taxes: 20% on fat, sugar, salt

: Price changes NOT taxes per se. Ignores incidence, supply changes

Impact of a SSB Tax
Equivalent of 15 fewer cans of Coke per month
Overall reduction: Equivalent of 66 few cans of Coke per month
Lunchables (plain)

340 calories
16g fat
30mg cholesterol
600mg sodium
16g sugar

Big Data
Nutrition and Health
Mexico: 10% SSB tax being considered
Impact of a Snack Tax
Overall reduction: Equivalent of 3 bags less per month
Impact of a Fat Tax
Impact of a Sugar Tax
Overall reduction: Equivalent of 80 fewer bars per month
Overall reduction: Equivalent of 55 fewer Lunchables per month
Full transcript