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The Impact of Four Alternative Policies to Decrease Soda Consumption

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  • Liu, Yizao
  • Lopez, Rigoberto A.
  • Zhu, Chen

Abstract

We examine the impact of four policy options on consumption of carbonated soft drinks (CSDs) by estimating a random-coefficient discrete-choice model of demand. Policy simulations using demand estimates indicate that the impacts of banning television advertising, limiting container size, and limiting calories on total consumption would be similar—an estimated 15.40–15.75 percent reduction. However, limiting calories would have a significantly greater impact on consumption of regular CSDs (–28.89 percent) and on calories consumed from CSDs (–19.34 percent). A tax on calories was least effective in curtailing overall consumption and consumption of regular CSDs.

Suggested Citation

  • Liu, Yizao & Lopez, Rigoberto A. & Zhu, Chen, 2014. "The Impact of Four Alternative Policies to Decrease Soda Consumption," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 0, pages 1-16.
    • Handle: RePEc:ags:arerjl:164593
    DOI: 10.22004/ag.econ.164593
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    3. Chen, Xuan & Liu, Yizao & Jaenicke, Edward C. & Rabinowitz, Adam N., 2019. "New concerns on caffeine consumption and the impact of potential regulations: The case of energy drinks," Food Policy, Elsevier, vol. 87(C), pages 1-1.
    4. Staudigel, Matthias & Anders, Sven, 2020. "Effects of the FDA's sodium reduction strategy in the U.S. market for chip products," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 216-238.
    5. Staudigel, Matthias & Oehlmann, Malte & Roosen, Jutta, 2024. "Demand effects of unilateral versus industry-wide sugar reduction scenarios," Food Policy, Elsevier, vol. 126(C).
    6. Biondi, Beatrice & Cornelsen, Laura & Mazzocchi, Mario & Smith, Richard, 2020. "Between preferences and references: Asymmetric price elasticities and the simulation of fiscal policies," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 108-128.
    7. Qizhong Yang & Keiichiro Honda & Tsunehiro Otsuki, 2019. "Structural demand estimation of the response to food safety regulations in the Japanese poultry market," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(3), pages 367-385, September.
    8. Hirsch, Stefan, 2022. "Product placement in the meat substitute sector: Evidence from a spatial demand model," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322181, Agricultural and Applied Economics Association.
    9. Bo Chen & Wuyang Hu & Qingjie Zhou, 2020. "Effects of local and national advertising across brands: the case of yogurt in China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(4), pages 1260-1281, October.
    10. Chen, Xuan & Liu, Yizao & Jaenicke, Edward C. & Rabinowitz, Adam N., "undated". "The Added Caffeine, Health Concerns and Potential Regulations: The Case of Energy Drinks," 2018 Annual Meeting, August 5-7, Washington, D.C. 273853, Agricultural and Applied Economics Association.
    11. Dogbe, Wisdom & Revoredo-Giha, Cesar, 2022. "Industry levy versus banning promotion on soft drinks in Scotland: A distributional analysis," Food Policy, Elsevier, vol. 106(C).

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