Tuesday, October 6, 2009

Fat taxes

Since AntiDismal has been lax of late in giving the latest VoxEU updates, I'll point to today's, where they knock back the case for "fat taxes". Long story short: while the obese have about 10% higher lifetime health care expenditures than do others, the elasticity of obesity with respect to the existence of public health insurance seems small. Or, at least, what evidence we have is inconsistent with high elasticity. Consequently, the only real argument for efficiency-augmenting fat taxes -- the alleviation of moral hazard in dietary and exercise choices -- fails.

I'd worry further that eating choices are only one among many potential margins along which choice could potentially be distorted by the existence of a public health system and the potential for highly intrusive regulation isn't small.

3 comments:

  1. What is the elasticity of obesity wrt the price of corn products? Aren't corn subsidies basically a negative fat tax?

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  2. Wouldn't know. But whether a fat tax would be effective in reducing obesity is a different question from whether there's any inefficiency generated by obesity.

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