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Balancing Health and Market Effectiveness in Food Corrective Taxation: Evidence from Variations in Sugar Tax Salience

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  • Wang, Jingbin
  • Hu, Wuyang
  • Li, Jian
  • Qing, Ping

Abstract

Over the past several decades, corrective taxes on products such as tobacco and alcohol have been widely employed as public health tools. With the rising prevalence of non-communicable chronic diseases associated with excessive sugar consumption, an increasing number of countries have implemented corrective taxes on sugar-sweetened beverages (SSBs). However, existing evidence on the effectiveness of such taxes remains inconclusive. Using a discrete choice experiment, this study evaluates the health and market effectiveness of SSB taxation under varying levels of tax salience, and examines the trade-off between these two policy objectives. Results indicate that when health effectiveness is prioritized, presenting both tax information and the tax amount yields the strongest behavioral response. In contrast, when market effectiveness is the primary concern, providing tax information alone proves most effective. When both objectives are considered simultaneously, displaying tax information along with the tax rate offers the most balanced outcome. These findings provide policy-relevant insights into how adjustments in tax salience can help reconcile health and market goals in the design of SSB taxes.

Suggested Citation

  • Wang, Jingbin & Hu, Wuyang & Li, Jian & Qing, Ping, 2025. "Balancing Health and Market Effectiveness in Food Corrective Taxation: Evidence from Variations in Sugar Tax Salience," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 360886, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea25:360886
    DOI: 10.22004/ag.econ.360886
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    References listed on IDEAS

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