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Public Policies and the Demand for Carbonated Soft Drinks: A Censored Quantile Regression Approach

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  • Gustavsen, Geir Waehler

Abstract

Heavy consumption of soda may contribute to obesity, strokes, and cardiac problems. From a health perspective, the distribution of the consumption is at least as important as the mean. Censored as well as ordinary quantile regression techniques were used to estimate the demand for sugary soda based on household data from 1989 to 1999. It was found that heavy drinkers are more price- and expenditure-responsive than are light drinkers. The study shows that increasing the taxes on carbonated soft drinks will lead to a small reduction in consumption for small and moderate consumers and a huge reduction for heavy consumers.

Suggested Citation

  • Gustavsen, Geir Waehler, 2005. "Public Policies and the Demand for Carbonated Soft Drinks: A Censored Quantile Regression Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24737, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae05:24737
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    File URL: http://purl.umn.edu/24737
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    References listed on IDEAS

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    More about this item

    Keywords

    soda demand; quantile regression; taxes; Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety; D12; I10;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I10 - Health, Education, and Welfare - - Health - - - General

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