Beyond the Price: How Non-Pecuniary Boomerang Effects Undermine Corrective Food Taxes

Non-pecuniary effects of sugar-sweetened beverage (SSB) taxes can alter consumer behavior beyond the price mechanism, thereby affecting the overall effectiveness of the tax. Recognizing and strategically leveraging these effects is essential for enhancing policy performance. The strong linkage between tax salience and non-pecuniary effects provides a promising lever for addressing this challenge. In a controlled experimental setting, we varied tax salience across five levels and applied a difference-in-differences framework to identify non-pecuniary effects and compare their magnitudes across treatment arms. Results show that non-pecuniary effects are present under most salience conditions and significantly reduce SSB demand. However, the strength of this effect follows an inverse U-shaped pattern as salience increases—initially intensifying, then diminishing. Further analysis suggests that the turning point may be attributable to boomerang mechanisms triggered by overly salient tax framing. These findings underscore the critical role of tax salience in shaping behavioral responses to corrective food taxes and offer practical insights for the design of more effective public health policies.