Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207228 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7837
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper addresses the question whether taxes on unhealthy food are suitable for internalizing intergenerational externalities inflicted by parents when they decide on their children’s diet. Within an OLG model with an imperfectly altruistic parent, the optimal steady state tax rate on unhealthy food is strictly positive. However, it is only second best since it not only reduces food consumption of the child but also distorts the parent's food consumption. Surprisingly, the optimal tax may under- or overinternalize the marginal damage.
Subjects: 
obesity
fat tax
altruism
JEL: 
D11
D62
H21
I12
Document Type: 
Working Paper
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