The Impact of Beverage Taxes on Quantity and Quality of Consumption in France
AbstractMany countries around the World have applied, or are studying to apply, sugar-sweetened beverage taxes as a way to mitigate increasing obesity. The objective of our study is to illustrate about the relevance of controlling for quality choices within product categories when analyzing the impact of a sugar-sweetened beverage tax. We calculate own-price quantity and quality elasticities using the methodology developed by Deaton (1988). For comparison purposes, we also calculate own price elasticities with a standard unit price methodology, which means using unit values as a proxy for prices. With both set of elasticities, we simulate a scenario of 20% tax. Using Deaton’s methodology, we find a decrease in quantity (-12.4%) and quality demanded (-0.3%). Using unit values methodology, we find a larger expected decrease in quantity demanded (-22.9%). Therefore, we show empirical evidence that both quantity and quality need to be taken into account to understand the implications of a sugar-sweetened beverage tax.
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Bibliographic InfoPaper provided by Agricultural and Applied Economics Association in its series 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. with number 150428.
Date of creation: 2013
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beverage tax; unit value bias; quality; Consumer/Household Economics; Food Consumption/Nutrition/Food Safety; International Relations/Trade; D10; D12; Q18;
Find related papers by JEL classification:
- D10 - Microeconomics - - Household Behavior - - - General
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
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