Electronic Theses and Dissertations

Date of Award

2011

Document Type

Dissertation

Degree Name

Ph.D. in Economics

First Advisor

William F. Shughart

Second Advisor

Richard Forgette

Third Advisor

William Chappell

Abstract

Although there is extensive theoretical and empirical coverage of the incentive effect of an income tax on labor supply in the economics literature, there is no study of the secondary behavioral effects of an income tax. In this thesis, I explore the relationship among income, marginal income tax, and body weight. Namely, I show that under general conditions the Engel curve for the optimal weight is an inverted U-shaped function and the effect of the marginal income tax upon weight is non-linear. The empirical investigation uses two datasets: a panel dataset with 459 state-level observations for US states from 1992 to 2000 and a micro-level dataset from the 2006 Behavioral Risk Factor Surveillance System (BRFSS) with 184,042 observations for 1145 counties and 50 states. The fixed effect estimation of the panel dataset suggests that the estimate of the effect of the marginal income tax rate on the conditional mean of BMI ranges from 0.20 to 0.36 under various specifications. The results of the mixed multilevel model indicate a strong and positive statistical association between the marginal income tax rate and BMI. The quantile regression analysis indicates that size of the effect is substantially greater at the upper quantiles of BMI, especially for the females.

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