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Food Taxes and Their Impacts on Food Spending

Author

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  • Dong, Diansheng
  • Stewart, Hayden

Abstract

Sales taxes on foods sold at grocery stores and/or restaurants exist in almost every county in the United States. By combining county-level sales tax data with U.S. Department of Agriculture’s (USDA) 2012–13 National Household Food Acquisition and Purchase Survey (FoodAPS), we examine the association between both types of taxes and a household’s spending on grocery and restaurant foods for three groups: USDA Supplemental Nutrition Assistance Program (SNAP) participants, households that are eligible for SNAP but do not participate in the program, and households that are not eligible for SNAP. We found that, among households that are eligible for SNAP but do not participate in the program, grocery taxes are associated with reduced spending on foods purchased for at-home consumption. No such association is found among the two other groups of households considered in this study, suggesting they are less sensitive to grocery taxes. SNAP households spend more money on foods purchased for at-home consumption in communities with higher restaurant taxes.

Suggested Citation

  • Dong, Diansheng & Stewart, Hayden, 2021. "Food Taxes and Their Impacts on Food Spending," USDA Miscellaneous 313477, United States Department of Agriculture.
    • Handle: RePEc:ags:usdami:313477
    DOI: 10.22004/ag.econ.313477
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    Cited by:

    1. Jones, Jordan & Toossi, Saied & Hodges, Leslie, 2022. "The Food and Nutrition Assistance Landscape: Fiscal Year 2021 Annual Report," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, vol. 2022(Economic ), June.
    2. 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.

    More about this item

    Keywords

    Agricultural and Food Policy; Consumer/Household Economics; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; Food Security and Poverty; Public Economics;
    All these keywords.

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