The Effects of a Fat Tax on French Households' Purchases: A Nutritional Approach

Abstract

Abstract This article assesses the effects of a “fat tax” on the nutrients purchased by French households across different income groups. This is done by making a preliminary estimation of price elasticities using a complete demand system on household scanner data, and by calculating nutrient elasticities using estimated price elasticities. We find that a fat tax has small and ambiguous effects on nutrients purchased by French households, and a slight effect on body weight in the short run, with a greater effect in the long run. Such a tax generates substantial tax revenue, but is highly regressive.