Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/205700
Authors: 
Creedy, John
Year of Publication: 
2016
Series/Report no.: 
New Zealand Treasury Working Paper No. 16/06
Publisher: 
New Zealand Government, The Treasury, Wellington
Abstract: 
This paper demonstrates the potential importance, when considering total calorie intake, of allowing for the substitution effects of imposing a selective tax on a commodity having a high sugar content, when non-taxed commodities exist and also have relatively high calorie content. A framework is presented which allows the elasticity of calorie consumption with respect to a price change to be derived. This brings out the role of relative budget shares, relative calorie content of goods and relative prices to be clearly seen, along with own- and cross-price elasticities. Their absolute values for each commodity group are not required. It is demonstrated that the focus of attention needs to be much wider than a simple concentration on the own-price elasticity of demand for the commodity group for which a sumptuary tax is envisaged.
Subjects: 
Sugar-sweetened beverage
calorie intake
demand elasticity
JEL: 
I10
H2
H31
ISBN: 
978-0-947519-44-5
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Working Paper

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