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Have soda sales tax effects changed over time? Scanner data comparison analyses

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  • Colantuoni, Francesca
  • Rojas, Christian
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    Abstract

    The scientific evidence on the effect of sugar consumption on obesity has propelled policy makers in several states across the U.S. to propose the imposition of a tax on soft drinks. In this paper, we look at the effect of two tax events: a 5.5% sales tax on soft drinks imposed by the state of Maine in 1991, and a 5% sales tax on soft drinks levied in Ohio in 2003. We investigate this question by using sales data collected by scanner devices in Maine, Massachusetts, New York and Connecticut, as well as Ohio, Illinois, Michigan and Pennsylvania. These samples comprise stores that account for more than 80% of all grocery sales nationwide and include brand-level sales data for the periods of study. We employ a difference-in-difference matching estimator (DIDM) that, in our setting, permits the comparison among treatment and control groups based on brand identity. Results suggest that sales tax had a statistically insignificant impact on the overall consumption of soft drinks. This finding is robust to several alternative specifications, and over time.

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    Bibliographic Info

    Paper provided by Agricultural and Applied Economics Association in its series 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington with number 124806.

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    Date of creation: 2012
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    Handle: RePEc:ags:aaea12:124806

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    Related research

    Keywords: Consumer/Household Economics; Demand and Price Analysis;

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    1. John Cawley, 2004. "The Impact of Obesity on Wages," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
    2. Jason M. Fletcher & David Frisvold & Nathan Tefft, 2008. "Can Soft Drink Taxes Reduce Population Weight?," Emory Economics 0808, Department of Economics, Emory University (Atlanta).
    3. Zheng, Yuqing & Kaiser, Harry M., 2008. "Advertising and U.S. Nonalcoholic Beverage Demand," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 37(2), October.
    4. Jason Fletcher & David Frisvold & Nathan Tefft, 2009. "The Effects of Soft Drink Taxes on Child and Adolescent Consumption and Weight Outcomes," Emory Economics 0908, Department of Economics, Emory University (Atlanta).
    5. Smith, Patricia K. & Bogin, Barry & Bishai, David, 2005. "Are time preference and body mass index associated?: Evidence from the National Longitudinal Survey of Youth," Economics & Human Biology, Elsevier, vol. 3(2), pages 259-270, July.
    6. Sue Mialon, 2009. "Product-bundling and Incentives for Merger and Strategic Alliance," Emory Economics 0907, Department of Economics, Emory University (Atlanta).
    7. Chouinard Hayley H & Davis David E & LaFrance Jeffrey T & Perloff Jeffrey M, 2007. "Fat Taxes: Big Money for Small Change," Forum for Health Economics & Policy, De Gruyter, vol. 10(2), pages 1-30, June.
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