Réquillart, Vincent, Soler, Louis-Georges and Zang, Yu (2015) Quality standards versus nutritional taxes: Health and welfare impacts with strategic firms. TSE Working Paper, n. 15-594, Toulouse

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Abstract

The goal of this paper is to better understand firms' strategic reactions to nutritional policies targeting food quality improvements and to derive optimal policies. We propose a model of product differentiation, taking into account the taste and health characteristics of products. We study how two firms react to alternative policies: an MQS policy, linear taxation of the two goods on the market, and taxation of the lowquality good. The MQS and the taxation of the low-quality product are the preferred options by a social planner. If taste is moderately important, the MQS policy is chosen by a populist and a paternalist social planner. If taste is a major component of choice, the populist planner chooses to tax the low-quality product whereas the paternalist planner prefers the MQS policy. Finally, for a paternalist social planner, an MQS-based policy always allows for higher levels of welfare than an information policy alone.

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• Quality standards versus nutritional taxes: Health and welfare impacts with strategic firms. (deposited 21 Sep 2015 13:08) [Currently Displayed]
  • Quality standards versus nutritional taxes: Health and welfare impacts with strategic firms. (deposited 14 Sep 2016 08:33)