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Partial versus General Equilibrium Calorie and Revenue Effects Associated with a Sugar-Sweetened Beverage Tax

Author

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  • Dharmasena, Senarath
  • Davis, George C.
  • Capps, Oral, Jr.

Abstract

Taxes on sugar-sweetened beverages have been widely proposed to combat the U.S. obesity crisis. Most previous work has found the effects of a SSB tax to be small to moderate. We address three limitations. First, we incorporate the supply side via a stochastic equilibrium displacement model. Second, we account for uncertainty in the underlying elasticities using probability distributions associated with elasticities. Third, we address industry revenue effects. We find that assumptions about the supply side are more important than assumptions about substitution. Ignoring supply side severely overestimates quantity and calorie effects and slightly underestimates revenue effects.

Suggested Citation

  • Dharmasena, Senarath & Davis, George C. & Capps, Oral, Jr., "undated". "Partial versus General Equilibrium Calorie and Revenue Effects Associated with a Sugar-Sweetened Beverage Tax," Reports 285222, Texas A&M University, Agribusiness, Food, and Consumer Economics Research Center.
    • Handle: RePEc:ags:tamagr:285222
    DOI: 10.22004/ag.econ.285222
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    Cited by:

    1. Alyssa J. Moran & Yuxuan Gu & Sasha Clynes & Attia Goheer & Christina A. Roberto & Anne Palmer, 2020. "Associations between Governmental Policies to Improve the Nutritional Quality of Supermarket Purchases and Individual, Retailer, and Community Health Outcomes: An Integrative Review," IJERPH, MDPI, vol. 17(20), pages 1-23, October.
    2. Juan Carlos Caro & Shu Wen Ng & Ricardo Bonilla & Jorge Tovar & Barry M Popkin, 2017. "Sugary drinks taxation, projected consumption and fiscal revenues in Colombia: Evidence from a QUAIDS model," PLOS ONE, Public Library of Science, vol. 12(12), pages 1-16, December.
    3. John Cawley & David Frisvold & David Jones & Chelsea Lensing, 2021. "The Pass‐Through of a Tax on Sugar‐Sweetened Beverages in Boulder, Colorado," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 987-1005, May.
    4. Davis, George & Keller, Andrew & Kinnucan, Henry & McCullough, Mike & Peterson, Hikaru Hanawa & Tonsor, Glynn & Taylor, Mykel, 2024. "Textbook Review of: Equilibrium Displacement Models: Theory, Applications, and Policy Analysis. By Gary W. Brester, Joseph A. Atwood, and Michael A. Boland," Applied Economics Teaching Resources (AETR), Agricultural and Applied Economics Association, vol. 7(3), December.
    5. Arteaga, Julio Cesar & Flores, Daniel & Luna, Edgar, 2017. "The effect of a soft-drink tax in Mexico: a time series approach," MPRA Paper 80831, University Library of Munich, Germany.
    6. Lin, Biing-Hwan & Dong, Diansheng & Carlson, Andrea & Rahkovsky, Ilya, 2017. "Potential dietary outcomes of changing relative prices of healthy and less healthy foods: The case of ready-to-eat breakfast cereals," Food Policy, Elsevier, vol. 68(C), pages 77-88.
    7. John Cawley & Chelsea Crain & David Frisvold & David Jones, 2018. "The Pass-Through of the Largest Tax on Sugar-Sweetened Beverages: The Case of Boulder, Colorado," NBER Working Papers 25050, National Bureau of Economic Research, Inc.

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