Time Allocation and Snacks and Sugar Sweetened Beverages Taxation

Obesity is a public health problem and several countries have introduced or proposed taxes on unhealthy foods. The paper analyzes the effects of the introduction of a tax on snacks/ssb in three different models where their consumption is a function of part of leisure time, due to the strength of habits and to the role of social cues in eating behaviour. All models encompass the possibility to perform physical exercise in order to reduce obesity (if individuals are weight conscious) and differ in residual time allocation: devoted to the bulk of daily activities, to labour supply or to other leisure activities. The main finding is that taxation always helps in reducing snacks/ssb consumption: nonetheless, in the first model, which can describe the choice of an adolescent, the tax might induce an increase in obesity in physically inactive individuals because of the shrinking of the choice set. In the second, it might arise if leisure linked to snacks/ssb consumption and the aggregate of consumption goods are separable; in the third, taxation achieves a decrease in obesity under weak conditions, and separability between the aggregate of consumption goods and residual leisure is sufficient to induce a decrease in obesity in physically active individuals. From a theoretical point of view, the paper underscores the relevance of the freedom to choose how to allocate time among different activities while, from an applied perspective, strongly supports snacks/ssb taxation combined with a campaign aimed at promoting physical activity even in the working environment.