Health organizations stimulate the development of low-fat variants to fight the obesity epidemic. We examine the effectiveness of this policy by studying the short- and long-term consequences of the first low-fat purchase on subsequent purchased volume and calories. Using a structural break analysis, we show that purchases increase in the short run after the first low-fat purchase, thereby confirming the single-occasion overconsumption effect of low-fat as shown in the experimental literature. Importantly, our results also show a significant positive long-term effect, which suggests that overpurchasing persists in the long run. In addition, our findings show that the long-term overpurchasing after the first low-fat purchase is solely due to the overpurchasing of low-fat items and not of regular items. These results provide support for the overgeneralization of claim effects and habit formation resulting in the enduring effect of healthier variants of unhealthy food.
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- Low-fat, Overpurchasing, household panel data, long-run impact, structural break analysis