IDEAS home Printed from https://ideas.repec.org/a/eee/ehbiol/v37y2020ics1570677x19302758.html
   My bibliography  Save this article

The impact of Seattle’s Sweetened Beverage Tax on beverage prices and volume sold

Author

Listed:
  • Powell, Lisa M.
  • Leider, Julien

Abstract

On January 1, 2018 the city of Seattle, WA, implemented a 1.75-cent per ounce (oz) Sweetened Beverage Tax (SBT) on sugar-sweetened beverages with at least 40 calories per 12 oz. This study drew on universal product code-level store scanner data and used a pre-post intervention-comparison site difference-in-differences (DID) study design to assess the impact of the SBT on taxed beverage prices in Seattle, the volume sold of taxed beverages in Seattle and in its 2-mile border area (cross-border shopping), and the volume sold of untaxed beverages (substitution) relative to changes in its comparison site of Portland, OR. The DID results showed that, on average, in the first year post-tax implementation, prices of taxed beverages rose by 1.03 cents per oz (p < 0.001) corresponding to a 59% tax pass-through rate. Volume sold of taxed beverages fell, on average, by 22% (p < 0.001) in the first year following the implementation of the tax. Volume sold of taxed beverages fell to a greater extent for family- versus individual-size beverages (31% versus 10%) and fell to a greater extent for soda (29%) compared to all other beverage types. Moderate substitution to untaxed beverages was found – volume sold of untaxed beverages increased by 4% (p < 0.05). The results revealed no significant increases in the overall volume sold of taxed beverages in the 2-mile border area of Seattle relative to its comparison site suggesting that tax avoidance in the form of cross-border shopping did not dampen the impact of the tax.

Suggested Citation

  • Powell, Lisa M. & Leider, Julien, 2020. "The impact of Seattle’s Sweetened Beverage Tax on beverage prices and volume sold," Economics & Human Biology, Elsevier, vol. 37(C).
    • Handle: RePEc:eee:ehbiol:v:37:y:2020:i:c:s1570677x19302758
    DOI: 10.1016/j.ehb.2020.100856
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1570677X19302758
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ehb.2020.100856?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. John Cawley & David Frisvold & Anna Hill & David Jones, 2020. "The Impact of the Philadelphia Beverage Tax on Prices and Product Availability," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(3), pages 605-628, June.
    2. Cawley, John & Frisvold, David & Hill, Anna & Jones, David, 2020. "Oakland’s sugar-sweetened beverage tax: Impacts on prices, purchases and consumption by adults and children," Economics & Human Biology, Elsevier, vol. 37(C).
    3. A. Colin Cameron & Douglas L. Miller, 2015. "A Practitioner’s Guide to Cluster-Robust Inference," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 317-372.
    4. Lynn D Silver & Shu Wen Ng & Suzanne Ryan-Ibarra & Lindsey Smith Taillie & Marta Induni & Donna R Miles & Jennifer M Poti & Barry M Popkin, 2017. "Changes in prices, sales, consumer spending, and beverage consumption one year after a tax on sugar-sweetened beverages in Berkeley, California, US: A before-and-after study," PLOS Medicine, Public Library of Science, vol. 14(4), pages 1-19, April.
    5. Falbe, J. & Rojas, N. & Grummon, A.H. & Madsen, K.A., 2015. "Higher retail prices of sugar-sweetened beverages 3 months after implementation of an excise tax in Berkeley, California," American Journal of Public Health, American Public Health Association, vol. 105(11), pages 2194-2201.
    6. Falbe, J. & Thompson, H.R. & Becker, C.M. & Rojas, N. & McCulloch, C.E. & Madsen, K.A., 2016. "Impact of the Berkeley excise tax on sugar-sweetened beverage consumption," American Journal of Public Health, American Public Health Association, vol. 106(10), pages 1865-1871.
    7. Cawley, John & Frisvold, David & Hill, Anna & Jones, David, 2019. "The impact of the Philadelphia beverage tax on purchases and consumption by adults and children," Journal of Health Economics, Elsevier, vol. 67(C).
    8. Vartanian, L.R. & Schwartz, M.B. & Brownell, K.D., 2007. "Effects of soft drink consumption on nutrition and health: A systematic review and meta-analysis," American Journal of Public Health, American Public Health Association, vol. 97(4), pages 667-675.
    9. John Cawley & Chelsea Crain & David Frisvold & David Jones, 2018. "The Pass-Through of the Largest Tax on Sugar-Sweetened Beverages: The Case of Boulder, Colorado," NBER Working Papers 25050, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zagorsky, Jay L. & Smith, Patricia K., 2020. "Who drinks soda pop? Economic status and adult consumption of sugar-sweetened beverages," Economics & Human Biology, Elsevier, vol. 38(C).
    2. Jones-Smith, Jessica C. & Pinero Walkinshaw, Lina & Oddo, Vanessa M. & Knox, Melissa & Neuhouser, Marian L. & Hurvitz, Philip M. & Saelens, Brian E. & Chan, Nadine, 2020. "Impact of a sweetened beverage tax on beverage prices in Seattle, WA," Economics & Human Biology, Elsevier, vol. 39(C).
    3. John Cawley & David Frisvold & David Jones, 2020. "The impact of sugar‐sweetened beverage taxes on purchases: Evidence from four city‐level taxes in the United States," Health Economics, John Wiley & Sons, Ltd., vol. 29(10), pages 1289-1306, October.
    4. Leider, Julien & Powell, Lisa M., 2022. "Longer-term impacts of the Oakland, California, sugar-sweetened beverage tax on prices and volume sold at two-years post-tax," Social Science & Medicine, Elsevier, vol. 292(C).
    5. Catherine Haeck & Nicholas Lawson & Krystel Poirier, 2022. "Estimating consumer preferences for different beverages using the BLP approach," Working Papers 22-01, Research Group on Human Capital, University of Quebec in Montreal's School of Management.
    6. Zhen, Chen & Chen, Yu & Lin, Biing-Hwan & Karns, Shawn & Mancino, Lisa & Ver Ploeg, Michele, 2021. "Do Obese and Nonobese Consumers Respond Differently to Price Changes? Implications of Preference Heterogeneity for Using Food Taxes and Subsidies to Reduce Obesity," MPRA Paper 112697, University Library of Munich, Germany.
    7. Zhai, Tianchang & Li, Lei & Wang, Jingjing & Si, Wei, 2022. "Will the consumption tax on sugar-sweetened beverages help promote healthy beverage consumption? Evidence from urban China," China Economic Review, Elsevier, vol. 73(C).
    8. Marinello, Samantha & Leider, Julien & Pugach, Oksana & Powell, Lisa M., 2021. "The impact of the Philadelphia beverage tax on employment: A synthetic control analysis," Economics & Human Biology, Elsevier, vol. 40(C).
    9. Jones-Smith, Jessica C. & Knox, Melissa A. & Coe, Norma B. & Walkinshaw, Lina P. & Schoof, John & Hamilton, Deven & Hurvitz, Philip M. & Krieger, James, 2022. "Sweetened beverage taxes: Economic benefits and costs according to household income," Food Policy, Elsevier, vol. 110(C).
    10. Haeck, Catherine & Lawson, Nicholas & Poirier, Krystel, 2022. "Estimating consumer preferences for different beverages using the BLP approach," Economics & Human Biology, Elsevier, vol. 46(C).
    11. Pierre Thomas Léger & Lisa M. Powell, 2021. "The impact of the Oakland SSB tax on prices and volume sold: A study of intended and unintended consequences," Health Economics, John Wiley & Sons, Ltd., vol. 30(8), pages 1745-1771, August.
    12. Cengiz, Ezgi & Cengiz, Doruk, 2020. "The Impacts of Soda Taxes in U.S. Localities," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304351, Agricultural and Applied Economics Association.
    13. Brendon McConnell, 2023. "What's Logs Got to do With it: On the Perils of log Dependent Variables and Difference-in-Differences," Papers 2308.00167, arXiv.org, revised Aug 2023.
    14. James Flynn, 2023. "Do sugar‐sweetened beverage taxes improve public health for high school aged adolescents?," Health Economics, John Wiley & Sons, Ltd., vol. 32(1), pages 47-64, January.
    15. Pourya Valizadeh & Shu Wen Ng, 2021. "Would A National Sugar‐Sweetened Beverage Tax in the United States Be Well Targeted?," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 961-986, May.
    16. Lisa M Powell & Julien Leider, 2022. "Impact of the Seattle Sweetened Beverage Tax on substitution to alcoholic beverages," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-10, January.
    17. Felipe Lozano‐Rojas & Patrick Carlin, 2022. "The effect of soda taxes beyond beverages in Philadelphia," Health Economics, John Wiley & Sons, Ltd., vol. 31(11), pages 2381-2410, November.
    18. John Cawley & David Frisvold & David Jones & Chelsea Lensing, 2021. "The Pass‐Through of a Tax on Sugar‐Sweetened Beverages in Boulder, Colorado," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 987-1005, May.
    19. Zhang, Ying & Li, Ruotong & Zhao, Qiran & Fan, Shenggen, 2023. "The impact of peer effect on students' consumption of sugar-sweetened beverages- instrumental variable evidence from north China," Food Policy, Elsevier, vol. 115(C).
    20. Yichen Zhong & Amy H. Auchincloss & Brian K. Lee & Ryan M. McKenna & Brent A. Langellier, 2020. "Sugar-Sweetened and Diet Beverage Consumption in Philadelphia One Year after the Beverage Tax," IJERPH, MDPI, vol. 17(4), pages 1-12, February.
    21. Marissa G. Hall & Isabella C. A. Higgins & Anna H. Grummon & Allison J. Lazard & Carmen E. Prestemon & Jennifer Mendel Sheldon & Lindsey Smith Taillie, 2021. "Using a Naturalistic Store Laboratory for Clinical Trials of Point-of-Sale Nutrition Policies and Interventions: A Feasibility and Validation Study," IJERPH, MDPI, vol. 18(16), pages 1-12, August.
    22. Cawley, John & Frisvold, David, 2023. "Review: Taxes on sugar-sweetened beverages: Political economy, and effects on prices, purchases, and consumption," Food Policy, Elsevier, vol. 117(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leider, Julien & Powell, Lisa M., 2022. "Longer-term impacts of the Oakland, California, sugar-sweetened beverage tax on prices and volume sold at two-years post-tax," Social Science & Medicine, Elsevier, vol. 292(C).
    2. Powell, Lisa M. & Leider, Julien & Léger, Pierre Thomas, 2020. "The impact of the Cook County, IL, Sweetened Beverage Tax on beverage prices," Economics & Human Biology, Elsevier, vol. 37(C).
    3. Jones-Smith, Jessica C. & Pinero Walkinshaw, Lina & Oddo, Vanessa M. & Knox, Melissa & Neuhouser, Marian L. & Hurvitz, Philip M. & Saelens, Brian E. & Chan, Nadine, 2020. "Impact of a sweetened beverage tax on beverage prices in Seattle, WA," Economics & Human Biology, Elsevier, vol. 39(C).
    4. Neuhofer, Zachary & McFadden, Brandon R. & Rihn, Alicia & Wei, Xuan & Khachatryan, Hayk & House, Lisa, 2020. "Can the updated nutrition facts label decrease sugar-sweetened beverage consumption?," Economics & Human Biology, Elsevier, vol. 37(C).
    5. Gonçalves, Judite & Pereira dos Santos, João, 2020. "Brown sugar, how come you taste so good? The impact of a soda tax on prices and consumption," Social Science & Medicine, Elsevier, vol. 264(C).
    6. John Cawley & David Frisvold & David Jones, 2020. "The impact of sugar‐sweetened beverage taxes on purchases: Evidence from four city‐level taxes in the United States," Health Economics, John Wiley & Sons, Ltd., vol. 29(10), pages 1289-1306, October.
    7. John Cawley & David Frisvold & David Jones & Chelsea Lensing, 2021. "The Pass‐Through of a Tax on Sugar‐Sweetened Beverages in Boulder, Colorado," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 987-1005, May.
    8. Schmacker, Renke & Smed, Sinne, 2020. "Do prices and purchases respond similarly to soft drink tax increases and cuts?," Economics & Human Biology, Elsevier, vol. 37(C).
    9. Zhen, Chen & Chen, Yu & Lin, Biing-Hwan & Karns, Shawn & Mancino, Lisa & Ver Ploeg, Michele, 2021. "Do Obese and Nonobese Consumers Respond Differently to Price Changes? Implications of Preference Heterogeneity for Using Food Taxes and Subsidies to Reduce Obesity," MPRA Paper 112697, University Library of Munich, Germany.
    10. Pierre Thomas Léger & Lisa M. Powell, 2021. "The impact of the Oakland SSB tax on prices and volume sold: A study of intended and unintended consequences," Health Economics, John Wiley & Sons, Ltd., vol. 30(8), pages 1745-1771, August.
    11. Pierre Dubois & Rachel Griffith & Martin O'Connell, 2020. "How Well Targeted Are Soda Taxes?," American Economic Review, American Economic Association, vol. 110(11), pages 3661-3704, November.
    12. Le Bodo, Yann & Etilé, Fabrice & Julia, Chantal & Friant-Perrot, Marine & Breton, Eric & Lecocq, Sébastien & Boizot-Szantai, Christine & Bergeran, Céline & Jabot, Françoise, 2022. "Public health lessons from the French 2012 soda tax and insights on the modifications enacted in 2018," Health Policy, Elsevier, vol. 126(7), pages 585-591.
    13. Stacey, Nicholas & Mudara, Caroline & Ng, Shu Wen & van Walbeek, Corné & Hofman, Karen & Edoka, Ijeoma, 2019. "Sugar-based beverage taxes and beverage prices: Evidence from South Africa's Health Promotion Levy," Social Science & Medicine, Elsevier, vol. 238(C), pages 1-1.
    14. John Cawley & David Frisvold & David Jones, "undated". "The Impact of Sugar-Sweetened Beverage Taxes on Purchases: Evidence from Four City-Level Taxes in the U.S," Mathematica Policy Research Reports c082eda4528243fba6be6c99f, Mathematica Policy Research.
    15. Cuadrado, Cristóbal & Dunstan, Jocelyn & Silva-Illanes, Nicolas & Mirelman, Andrew J. & Nakamura, Ryota & Suhrcke, Marc, 2020. "Effects of a sugar-sweetened beverage tax on prices and affordability of soft drinks in Chile: A time series analysis," Social Science & Medicine, Elsevier, vol. 245(C).
    16. Pourya Valizadeh & Shu Wen Ng, 2021. "Would A National Sugar‐Sweetened Beverage Tax in the United States Be Well Targeted?," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 961-986, May.
    17. He, Xiaoyang & Balagtas, Joseph V., 2022. "Spatial retail competition reduces the effects of soda taxes on price and quantity: Evidence from the Philadelphia Beverage Tax," Food Policy, Elsevier, vol. 112(C).
    18. Brandon J. Restrepo & Jonathan H. Cantor, 2020. "The effects of soda taxes on adolescent sugar intake and blood sugar," Health Economics, John Wiley & Sons, Ltd., vol. 29(11), pages 1422-1434, November.
    19. Nano Barahona & Cristóbal Otero & Sebastián Otero, 2023. "Equilibrium Effects of Food Labeling Policies," Econometrica, Econometric Society, vol. 91(3), pages 839-868, May.
    20. Alyssa J. Moran & Yuxuan Gu & Sasha Clynes & Attia Goheer & Christina A. Roberto & Anne Palmer, 2020. "Associations between Governmental Policies to Improve the Nutritional Quality of Supermarket Purchases and Individual, Retailer, and Community Health Outcomes: An Integrative Review," IJERPH, MDPI, vol. 17(20), pages 1-23, October.

    More about this item

    Keywords

    Sugar-sweetened beverages; SSB tax; Tax pass-through; Tax policy; Fiscal policy; Cross-border shopping;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ehbiol:v:37:y:2020:i:c:s1570677x19302758. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622964 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.