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Grocery food taxes and U.S. county obesity and diabetes rates

Author

Listed:
  • Lingxiao Wang

    (University of Kentucky)

  • Yuqing Zheng

    (University of Kentucky)

  • Steven Buck

    (University of Kentucky)

  • Diansheng Dong

    (Department of Agriculture, Economic Research Service, U.S)

  • Harry M. Kaiser

    (Cornell University)

Abstract

Background Grocery food taxes represent a stable tax revenue stream for state and municipal government during times of adverse economic shocks such as that observed under the coronavirus disease 2019 (COVID-19) pandemic. Previous research, however, suggests a possible mechanism through which grocery taxes may adversely affect health. Our objectives are to document the spatial and temporal variation in grocery taxes and to empirically examine the statistical relationship between county-level grocery taxes and obesity and diabetes. Methods We collect and assemble a novel national dataset of annual county and state-level grocery taxes from 2009 through 2016. We link this data to three-year, county-level estimates based on data from the Centers for Disease Control and Prevention on rates of obesity and diabetes and provide a nation-wide spatial characterization of grocery taxes and these two health outcomes. Using a county-level fixed effects estimator, we estimate the effect of grocery taxes on obesity and diabetes rates, also controlling for a subset of potential confounders that vary over time. Results We find a 1 percentage point increase in grocery taxes is associated with 0.588 and 0.215 percentage point increases in the county-level obesity and diabetes rates. Conclusion Counties with grocery taxes have increased prevalence of obesity and diabetes. We estimate the economic burden of increased obesity and diabetes rates resulting from grocery taxes to be $5.9 billion. Based on this estimate, the benefit-cost ratio of removing grocery taxes across the United States only considering the effects on obesity and diabetes rates is 1.90.

Suggested Citation

  • 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.
    • Handle: RePEc:spr:hecrev:v:11:y:2021:i:1:d:10.1186_s13561-021-00306-2
    DOI: 10.1186/s13561-021-00306-2
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    References listed on IDEAS

    as
    1. Zheng, Yuqing & Dong, Diansheng & Burney, Shaheer & Kaiser, Harry M., 2019. "Eat at Home or Away from Home? The Role of Grocery and Restaurant Food Sales Taxes," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 44(1), January.
    2. Chou, Shin-Yi & Grossman, Michael & Saffer, Henry, 2004. "An economic analysis of adult obesity: results from the Behavioral Risk Factor Surveillance System," Journal of Health Economics, Elsevier, vol. 23(3), pages 565-587, May.
    3. Rafael Moreira Claro & Vargas Hernandez & Joel Alberto & Satoru Shimokawa & Euna Han & Sharada Keats & Steve Wiggins, 2015. "The Rising Cost of a Healthy Diet – Changing Relative prices of Foods in High- Income and Emerging Economies," Working Papers id:7250, eSocialSciences.
    4. 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.
    5. Courtemanche, Charles & Tchernis, Rusty & Ukert, Benjamin, 2018. "The effect of smoking on obesity: Evidence from a randomized trial," Journal of Health Economics, Elsevier, vol. 57(C), pages 31-44.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 8th March 2021
      by Chris Sampson in The Academic Health Economists' Blog on 2021-03-08 12:00:01

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    Cited by:

    1. Wang, Lingxiao & Zheng, Yuqing, 2024. "Why are grocery foods taxed in the United States? Theory and spatial evidence from multilevel government interactions," Regional Science and Urban Economics, Elsevier, vol. 104(C).

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    Keywords

    Grocery tax; Diabetes; Obesity;
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