title: Mandatory labels, taxes and market forces: An empirical evaluation of fat policies.
abstract: The public-health community views mandatory Front-of-Pack (FOP) nutrition labels and nutritional taxes as promising tools to control the growth of food-related chronic diseases. This paper uses household scanner data to propose an ex-ante evaluation and comparison of these two policy options for the fromage blanc and dessert yogurt market. In most markets, labelling is voluntary and firms display fat labels only on the FOP of low-fat products to target consumers who do not want to eat fat. We here separately identify consumer preferences for fat and for FOP fat labels by exploiting an exogenous difference in legal labelling requirements between these two product categories. Estimates of demand curves are combined with a supply model of oligopolistic price competition to simulate policies. We find that a feasible ad valorem fat tax dominates a mandatory FOP-label policy from an economic perspective, but both are equally effective in reducing average fat purchases.
authors.affiliation: INRA, UR1303 ALISS, F-94205 Ivry-sur-Seine Cedex, France. Electronic address: Olivier.Allais@ivry.inra.fr.
authors.forename: Olivier
authors.initials: O
authors.lastname: Allais
authors.affiliation: INRA, UR1303 ALISS, F-94205 Ivry-sur-Seine Cedex, France; Paris School of Economics, F-75600 Paris, France. Electronic address: Fabrice.Etile@ivry.inra.fr.
authors.forename: Fabrice
authors.initials: F
authors.lastname: Etilé
authors.affiliation: INRA, UR1303 ALISS, F-94205 Ivry-sur-Seine Cedex, France. Electronic address: Sebastien.Lecocq@ivry.inra.fr.
authors.forename: Sébastien
authors.initials: S
authors.lastname: Lecocq
mesh_terms: D002611:Cheese / Q000032:analysis / Q000191:economics; D002755:Choice Behavior; D002908:Chronic Disease / Q000191:economics / Q000517:prevention & control*; D003132:Commerce; D004041:Dietary Fats / Q000009:adverse effects / Q000032:analysis* / Q000191:economics; D005062:European Union; D005504:Food Analysis / Q000191:economics / Q000331:legislation & jurisprudence; D005515:Food Labeling / Q000191:economics / Q000331:legislation & jurisprudence*; D005518:Food Preferences; D005602:France; D006801:Humans; D018673:Nutrition Policy / Q000191:economics / Q000331:legislation & jurisprudence*; D009753:Nutritive Value; D013660:Taxes / Q000331:legislation & jurisprudence / Q000639:trends; D015014:Yogurt / Q000032:analysis / Q000191:economics
chemical_list: D004041:Dietary Fats
keywords: Ad valorem tax; Differentiated products; Firm strategic pricing; Mandatory fat-content label; Quasi-natural experiment