Abstract
ABSTRACTThis paper studies the effectiveness of taxes, subsidies and cash incentives in reducing unhealthy food consumption. Using an inter‐temporal rational choice model with habit, we calibrate and simulate the effect of those policies to US and UK data. Our findings suggest that cash incentives may be the most effective policy in reducing unhealthy food consumption. However, when comparing the reduction in costs for the social security system with the implementation costs, cash incentives can lead to significant monetary losses. Taxes are relatively ineffective in reducing unhealthy food consumption. Finally, subsidies have the best balance between effectiveness and monetary benefits to society.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
