FAO Agricultural Development Economics Policy Brief, No. 65.

In the context of fiscal reform in Costa Rica (value added tax revision), the definition of a new basic tax basket – canasta básica tributaria (CBT), incorporating nutritional criteria – is underway in the country. Measuring price elasticities is essential because it allows: knowing the extent to which food demand reacts to price changes, anticipating changes in the quantities demanded as a result of fiscal policy changes, measuring potential substitution and complementary effects between food groups, and potential nutritional effects of fiscal policies. As a result, it helps to provide recommendations on the content of a CBT with nutritional criteria.