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Price elasticities of major food categories to inform fiscal reform in Costa Rica. FAO Agricultural Development Economics Policy Brief 65
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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.
The findings of this brief have been adapted from the FAO Agricultural Development Economics Working Paper 23-04 Fiscal reform in Costa Rica – Price elasticities of major food categories to inform decision-making.