There has been surprisingly little research to date on the supply-side role of food manufacturers on equilibrium health outcomes for consumers. In this letter we consider an oligopoly model in which food processors choose the health composition of manufactured food. We show that price competition between food processors leads to unhealthy food composition in the market equilibrium, even under circumstances in which consumers know food composition is unhealthy. Taxes on manufactured food decrease the healthiness of manufactured foods whenever improved consumer health increases the price elasticity of food demand.
food design; consumer health; manufactured food; nutritional policies;
- I18: Government Policy • Regulation • Public Health
- L13: Oligopoly and Other Imperfect Markets
- Q18: Agricultural Policy • Food Policy
Stephen F. Hamilton, and Vincent Réquillart, “Market Competition and the Health Composition of Manufactured Food”, Health Economics, vol. 26, n. 12, December 2017, pp. 1637–1643.
Health Economics, vol. 26, n. 12, December 2017, pp. 1637–1643