• Theepakorn Jithitikulchai and Tatiana Andreyeva.
• World Bank, Bangkok, 10330, Thailand. theepakorn@worldbank.org.
• Appl Health Econ Health Policy. 2018 Aug 1; 16 (4): 549-558.

BackgroundExcessive consumption of sugar-sweetened beverages is a major concern in the efforts to improve diet and reduce obesity in USA, particularly among low-income populations. One of the most commonly proposed strategies to reduce sugar-sweetened beverage consumption is increasing beverage prices through taxation.ObjectiveThe objective of this study was to evaluate whether and how price-based policies could reduce sugar-sweetened beverage consumption among participants in the federal Supplemental Nutrition Assistance Program.MethodsUsing point-of-sale data from a regional supermarket chain (58 stores), we estimated the responsiveness of demand to sugar-sweetened beverage price changes among Supplemental Nutrition Assistance Program-participating families with young children. Own-price and cross-price elasticities for non-alcoholic beverages were estimated using a Quadratic Almost Ideal Demand System model.ResultsThe study found evidence that a tax-induced sugar-sweetened beverage price increase would reduce total sugar-sweetened beverage purchases among Supplemental Nutrition Assistance Program participants, who were driven by purchase shifts away from taxed sodas and sports drinks to non-taxed beverages (bottled water, juice, milk). The substitution of non-taxed caloric beverages decreases the marginal effects of the sugar-sweetened beverage tax, yet the direct tax effects are large enough to reduce the overall caloric intake, with the average net reduction in monthly calories from sugar-sweetened beverages estimated at around 8% for a half-cent per ounce tax and 16% for a one cent per ounce tax.ConclusionA beverage price increase in the form of an excise tax would reduce sugar-sweetened beverage consumption and increase healthier beverage purchases among low-income families.

19 keywords...

hide…