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Unhealthy food, regulations, and consumer welfare: The US microwaveable popcorn market

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  • Christoph Bauner
  • Debi Prasad Mohapatra
  • Nadia Streletskaya
  • Emily Wang

Abstract

Due to significant health concerns, governments across the world have taken measures to regulate dietary trans fat, for example, through bans and ad‐valorem taxes. We assess the effectiveness of these two strategies and measure their ensuing welfare implications. We estimate a structural demand and supply model for the microwavable popcorn market using NielsenIQ Homescan data. Applying the recovered consumer preferences and marginal costs, we find a ban and a 35% tax result in similar levels of welfare loss and trans fat reduction. A 10% tax can still significantly reduce trans fat consumption (around 48%), while the associated consumer welfare loss is substantially smaller.

Suggested Citation

  • Christoph Bauner & Debi Prasad Mohapatra & Nadia Streletskaya & Emily Wang, 2024. "Unhealthy food, regulations, and consumer welfare: The US microwaveable popcorn market," Economic Inquiry, Western Economic Association International, vol. 62(4), pages 1558-1578, October.
    • Handle: RePEc:bla:ecinqu:v:62:y:2024:i:4:p:1558-1578
    DOI: 10.1111/ecin.13240
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