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An Analysis of Beverage Size Restrictions

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  • Brian A Bourquard
  • Steven Y Wu

Abstract

Due to high levels of obesity, various government interventions have been proposed to curb the consumption of sugar‐sweetened beverages (SSBs). The New York City “soda ban,” which proposed to limit the size of SSBs is among the most well‐known and controversial. While public debates about beverage‐size‐restrictions tend to focus on how consumers are impacted, we use a nonlinear pricing model to show that, for all but extremely tight restrictions, consumer welfare would be unaffected by an enforceable restriction. However, sellers’ profit would decline. While consumption is predicted to decline overall, the magnitude of the decline will vary by consumer segment.

Suggested Citation

  • Brian A Bourquard & Steven Y Wu, 2020. "An Analysis of Beverage Size Restrictions," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 169-185, January.
    • Handle: RePEc:wly:ajagec:v:102:y:2020:i:1:p:169-185
    DOI: 10.1093/ajae/aaz033
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    References listed on IDEAS

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    Cited by:

    1. Chepeliev, Maksym & Gatto, Alessandro & Hertel, Thomas W. & Simonato, Thiago C., 2024. "Policy solutions for transitioning to healthier and sustainable diets in the United States," 2024 Annual Meeting, July 28-30, New Orleans, LA 343801, Agricultural and Applied Economics Association.
    2. José G. Nuño‐Ledesma & Steven Y. Wu & Joseph V. Balagtas, 2025. "Soda taxes versus cup sizes when the retailer practices nonlinear pricing: An experiment," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 73(3), pages 229-246, September.
    3. Sunjin Ahn & Jayson L. Lusk, 2021. "Non‐Pecuniary Effects of Sugar‐Sweetened Beverage Policies," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(1), pages 53-69, January.
    4. repec:ags:aaea22:343801 is not listed on IDEAS
    5. Nuño Ledesma José G. & Wu Steven Y. & Balagtas Joseph V., 2022. "Nonlinear Pricing Under Regulation: Comparing Cap Rules and Taxes in the Laboratory," Working Papers 2022-10, Banco de México.

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