This paper concerns the policy implications of a potential self-control problem underlying the consumption of unhealthy food. Our results show that subsidies on wealth and health capital can be used to implement a socially optimal resource allocation.

The starting point for this paper is the potential self-control problem underlying the consumption of unhealthy food. The purpose is to analyze public policies, which are designed to correct for the welfare loss associated with such behavior. Contrary to previous studies, our analysis suggests...