Postprint version. Published in Journal of Health Economics, Volume 27, January 1, 2008, pages 45-68.
Copyright © 2007Elsevier.
NOTE: At the time of publication, the author Christiane Schroeter was not yet affiliated with Cal Poly.
The definitive version is available at http://dx.doi.org/10.1016/j.jhealeco.2007.04.001.
We develop a theoretical model to identify conditions under which price and income changes are most likely to change weight. Although it is intuitive that raising the price of high-calorie food will decrease consumption of such goods; it is not clear that such an outcome will actually reduce weight. Our empirical analysis demonstrates a case where a tax on food away from home, a food intake category blamed for much of the rise in obesity, could lead to an increase in body weight; a finding which emphasizes the need to employ economic modeling when developing public policy to reduce obesity.
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