Non‐Linear Effects of Soda Taxes on Consumption and Weight Outcomes

Abstract

The potential health impacts of imposing large taxes on soda to reduce the incidence of obesity have been of interest for over a decade. While estimates of the effects of existing soda taxes with low rates suggest little impact, recent proposals suggest that large taxes may be effective in reducing weight because of non-linear consumption responses or threshold effects. This paper tests this hypothesis in two ways. First, we estimate non-linear effects of taxes using the range of current rates. Second, we leverage the sudden, relatively large soda tax increase in two states during the early 1990s combined with new synthetic control methods useful for comparative case studies. Our findings suggest virtually no evidence of non-linear or threshold effects.

Cost Effectiveness of a Sugar-Sweetened Beverage Excise Tax in the U.S.

“…24 In a repeated cross-sectional analysis, the same authors estimated non-significant BMI differences among adults and youth with a 1%-higher tax rate. 18,20 Powell and colleagues 19 found non-significant associations between state soda tax rates and overall youth BMI.…”

“…18,20 Conversely, another simulation study assumed that tax-induced reductions in SSB intake will not result in any caloric compensation. 65 The empirical association between SSB prices (included tax-driven price changes) and BMI supporting this argument is inconsistent.…”

“…16 Mexico implemented a 1 peso/liter excise tax on SSBs in January 2014, which preliminary analyses suggest resulted in a 10% reduction in SSB purchases. 17 Although evidence regarding the empirical associations among beverage prices, the current low tax rates, consumption, and BMI has been mixed, 9,[18][19][20] a number of studies have found that higher beverage taxes and prices are linked to significantly lower BMI. [21][22][23][24] Moreover, recently proposed tax strategies differ in many ways from existing sales taxes.…”

Forecasting Nutrition Research in 2020

“…Proposals to place taxes and restrictions on high-calorie or high-sugar foods and beverages continue to be advanced, with minimal evidence that such actions are effective and no clear consensus of what "high-calorie," "high-fat," "high-sugar," or "bad" foods or beverages means [20]. Unlike tobacco smoking, where overwhelming evidence exists regarding negative health impacts and where taxation has reduced consumption, a similar approach for some foods and beverages is fraught with peril.…”

Measuring Consumer Responses to a Bottled Water Tax Policy

“…Several papers address the question of whether sales taxes on sugar-sweetened sodas have an impact on either consumers' consumption of these products or consumers' weight. These studies generally find no significant effects, possibly due to the low salience of sales taxes relative to excise taxes (Fletcher, Frisvold, and Tefft., 2015;Fletcher, Frisvold, and Tefft., 2010;Sturm et al, 2010;Powell, Chriqui, and Chaloupka 2009). While numerous studies estimate how a beverage tax 5 would affect consumer demand (e.g., Zhen et al, 2014), our work is relatively rare in that we exploit both cross-sectional and temporal variation in tax rates rather than merely price variation in order to identify an effect.…”