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Fiscal reform in Costa Rica

Price elasticities of major food categories to inform decision-making















Dal, E., Rivera, R. & Morales Opazo, C. 2023. Fiscal reform in Costa Rica – Price elasticities of major food categories to inform decision-making. FAO Agricultural Development Economics Working Paper, No. 23-04. Rome, FAO.





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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.
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