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Taxing Caloric Sweetened Beverages: Potential Effects on Beverage Consumption, Calorie Intake, and Obesity

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  • Smith, Travis A.
  • Biing-Hwan, Lin
  • Lee, Jonq-Ying

Abstract

The link between high U.S. obesity rates and the overconsumption of added sugars, largely from sodas and fruit drinks, has prompted public calls for a tax on caloric sweetened beverages. Faced with such a tax, consumers may reduce consumption of these sweetened beverages and substitute nontaxed beverages, such as bottled water, juice, and milk. This study estimated that a tax-induced 20-percent price increase on caloric sweetened beverages could cause an average reduction of 37 calories per day, or 3.8 pounds of body weight over a year, for adults and an average of 43 calories per day, or 4.5 pounds over a year, for children. Given these reductions in calorie consumption, results show an estimated decline in adult overweight prevalence (66.9 to 62.4 percent) and obesity prevalence (33.4 to 30.4 percent), as well as the child at-risk-for-overweight prevalence (32.3 to 27.0 percent) and the overweight prevalence (16.6 to 13.7 percent). Actual impacts would depend on many factors, including how the tax is reflected in consumer prices and the competitive strategies of beverage manufacturers and food retailers.

Suggested Citation

  • Smith, Travis A. & Biing-Hwan, Lin & Lee, Jonq-Ying, 2010. "Taxing Caloric Sweetened Beverages: Potential Effects on Beverage Consumption, Calorie Intake, and Obesity," Economic Research Report 95465, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uersrr:95465
    DOI: 10.22004/ag.econ.95465
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    File URL: http://ageconsearch.umn.edu/record/95465/files/ERR100.pdf
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    References listed on IDEAS

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    1. Craig A. Gallet & John A. List, 2003. "Cigarette demand: a meta‚Äźanalysis of elasticities," Health Economics, John Wiley & Sons, Ltd., vol. 12(10), pages 821-835, October.
    2. Chouinard Hayley H & Davis David E & LaFrance Jeffrey T & Perloff Jeffrey M, 2007. "Fat Taxes: Big Money for Small Change," Forum for Health Economics & Policy, De Gruyter, vol. 10(2), pages 1-30, June.
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    Keywords

    Food Consumption/Nutrition/Food Safety; Health Economics and Policy;

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