Obesity and Smoking: Can We Catch Two Birds with One Tax?

Abstract

The debate on tobacco taxes and fat taxes often treats smoking and eating as independent behaviors. However, since there exists medical and sociological evidence about the interdependence between eating and smoking choices, antismoking policies may also affect the obesity prevalence and fat taxes could influence smoking behavior. We address this issue from a theoretical standpoint and propose a dynamic rational model where eating and smoking are simultaneous choices that jointly affect body weight and addiction to smoking. Focusing on direct and cross price effects, we compare tobacco taxes and fat taxes and we show that a single policy tool can reduce both smoking and body weight. In particular, fat taxes can be more effective than tobacco taxes at simultaneously fighting obesity and smoking.

The Demand for Cigarettes as Derived from the Demand for Weight Loss: A Theoretical and Empirical Investigation

“…The difference in results appears to be driven in part by differences in the way the studies control for time trends (Baum, 2009;Nonnemaker et al, 2009) and differences in controlling for lags of prices or taxes (Courtemanche, 2009). Building on this literature, Dragone et al (2013b) develop a theoretical model to compare the effects of taxes on cigarettes with those on fatty foods and conclude that fat taxes can be more effective than cigarette taxes at reducing both obesity and smoking.…”

“…Building on this literature, Dragone et al . () develop a theoretical model to compare the effects of taxes on cigarettes with those on fatty foods and conclude that fat taxes can be more effective than cigarette taxes at reducing both obesity and smoking.…”

A Dynamic Model of Gambling Addiction with Social Costs: Theory and Policy Solutions

“…Our model borrows extensively from Dragone et al (2016) [17] and assumes that a rational agent chooses, given her budget constraint, how much to consume of: 1) a good s which creates addiction (i.e. gambling with slot machines) 2; 2) a relational good r; 3) a standard composite numerary consumption good q with unit price.…”

“…For simplicity and without lack of generality preferences for gambling are incorporated in the U s > 0 assumption. Following Dragone et al [17], we define reinforcement the case where, the more a person is addicted to gambling, the more she desires to consume the addictive good, so that the marginal utility of consuming an addictive good increases with past consumption of that good, that is, U sa > 0. On the other side, tolerance means that utility from a given amount of consumption is lower when past consumption is greater, implying that U a < 0 for a > 0.…”

Body Weight, Dieting and Obesity Traps

“…The objective function (24) , differently from (3) represents the expected lifetime utility function of an agent with stochastic terminal time. Following Dragone et al (2013), Yaari (1965 we can exploit a very useful result in order to prove the equivalency of the two. Equation (24) can be equivalently represented in terms of the following objective…”