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The effects of food sales taxes on household food spending: An application of a censored cluster model

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  • Diansheng Dong
  • Yuqing Zheng
  • Hayden Stewart

Abstract

This study proposes a model of household food spending that accounts for zero censoring and can be applied to data collected through a clustered survey design to investigate the impact of food sales taxes on three groups: households who are eligible for and participate in the Supplemental Nutrition Assistance Program (SNAP), households who are eligible but do not participate in the program, and households who are not eligible for the program. We find that SNAP participating households are largely insensitive to grocery taxes and respond to restaurant taxes by shifting more of their food dollars towards at‐home foods. Among households who are eligible for SNAP but do not participate in the program, grocery taxes reduce spending on foods purchased for at‐home consumption, and thereby increase the amount of the total food budget allocated to away from home foods. This is concerning from a nutrition and health standpoint since away from home foods tend to be more calorie dense and nutritionally poorer than at home foods.

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  • Diansheng Dong & Yuqing Zheng & Hayden Stewart, 2020. "The effects of food sales taxes on household food spending: An application of a censored cluster model," Agricultural Economics, International Association of Agricultural Economists, vol. 51(5), pages 669-684, September.
    • Handle: RePEc:bla:agecon:v:51:y:2020:i:5:p:669-684
    DOI: 10.1111/agec.12585
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    Cited by:

    1. Zhao, Jianqiang & Zheng, Yuqing & Kaiser, Harry M., 2022. "The Pass-through of Sales Taxes on Groceries: Evidence from Nielsen Homescan Data," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322140, Agricultural and Applied Economics Association.
    2. Fuqiang Dai & Hao Liu & Xia Zhang & Qing Li, 2022. "Does the Equalization of Public Services Effect Regional Disparities in the Ratio of Investment to Consumption? Evidence From Provincial Level in China," SAGE Open, , vol. 12(1), pages 21582440221, March.
    3. Dong, Diansheng & Stewart, Hayden, 2021. "Food Taxes and Their Impacts on Food Spending," Economic Research Report 327187, United States Department of Agriculture, Economic Research Service.
    4. Ver Ploeg, Michele & Scharadin, Benjamin & Miller, Lauren & Gonzalez, Jeffrey & Odom, Rodney, 2024. "Utilizing the USDA’s National Household Food Acquisition and Purchase Survey to Calculate a Household-Level Food Environment Measure," Technical Bulletins 342466, United States Department of Agriculture, Economic Research Service.
    5. Lingxiao Wang & Yuqing Zheng & Steven Buck & Diansheng Dong & Harry M. Kaiser, 2021. "Grocery food taxes and U.S. county obesity and diabetes rates," Health Economics Review, Springer, vol. 11(1), pages 1-9, December.

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