Taxing sugar sweetened beverages

Long time readers know I think that the prohibition against soda in New York City isn’t great policy. I’ve been more hesitant to come out strongly against a tax against sugar sweetened beverages. Sure, there are examples of how such taxes fail, but I don’t think that taxing things is as bad as prohibiting them. A study was recently released that modeled the effects of such a tax. “Implications of a sugar-sweetened beverage (SSB) tax when substitutions to non-beverage items are considered“:

Using the 2006 Homescan panel, we estimate the changes in energy, fat and sodium purchases resulting from a tax that increases the price of sugar-sweetened beverages (SSBs) by 20% and the effect of such a tax on body weight. In addition to substitutions that may arise with other beverages, we account for substitutions between SSBs and 12 major food categories. Our main findings are that the tax would result in a decrease in store-bought energy of 24.3 kcal per day per person, which would translate into an average weight loss of 1.6 pounds during the first year and a cumulated weight loss of 2.9 pounds in the long run. We do not find evidence of substitution to sugary foods and show that complementary foods could contribute to decreasing energy purchases. Despite their significantly lower price elasticity, the tax has a similar effect on calories for the largest purchasers of SSBs.

Unfortunately, the paper appears to be gated. The take home findings, however, are that a tax on sugar sweetened beverages that increased the price by 20% would result in a decrease in calorie consumption that would lead to a weight loss of almost 3 pounds over 10 years. This study was novel in that it accounted for changes in other foods, as well as sugar sweetened beverages, in documenting the effects of the tax.

Now we can debate how valuable 3 pounds of weight loss is. We can also debate as to whether a 20% tax is politically feasible. But at least it appears that a tax might produce some results. Fighting obesity is so difficult that sometimes I despair that anything would work. I also appreciate the addition of evidence to this debate.

But if you’re asking my opinion, I think that any implementable tax would likely not yield results that would make a difference in the real world. We need a holistic solution. Keep working.


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