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Price elasticities of major food categories to inform fiscal reform in Costa Rica. FAO Agricultural Development Economics Policy Brief 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.

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.


Latin America & Caribbean