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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
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    File URL: http://purl.umn.edu/95465
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    Cited by:

    1. Abigail M. Okrent & Julian M. Alston, 2012. "The Effects of Farm Commodity and Retail Food Policies on Obesity and Economic Welfare in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(3), pages 611-646.
    2. Georgia S. Papoutsi & Andreas C. Drichoutis & Rodolfo M. Nayga Jr., 2013. "The Causes Of Childhood Obesity: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 27(4), pages 743-767, September.
    3. repec:taf:applec:v:48:y:2016:i:41:p:3976-3994 is not listed on IDEAS
    4. Dharmasena, Senarath & Davis, George & Capps, Oral, Jr., 2014. "Partial versus General Equilibrium Calorie and Revenue Effects Associated with a Sugar-Sweetened Beverage Tax," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 39(2), August.
    5. Emily Yucai Wang, 2015. "The impact of soda taxes on consumer welfare: implications of storability and taste heterogeneity," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 409-441, June.
    6. Nicoletta Berardi & Patrick Sevestre & Marine Tépaut & Alexandre Vigneron, 2016. "The impact of a ‘soda tax’ on prices: evidence from French micro data," Applied Economics, Taylor & Francis Journals, vol. 48(41), pages 3976-3994, September.
    7. Todd, Jessica E. & Leibtag, Ephraim S. & Penberthy, Corttney, 2011. "Geographic Differences in the Relative Price of Healthy Foods," Economic Information Bulletin 117976, United States Department of Agriculture, Economic Research Service.
    8. Papoutsi, Georgia & Nayga, Rodolfo & Lazaridis, Panagiotis & Drichoutis, Andreas, 2013. "Nudging parental health behavior with and without children's pestering power: Fat tax, subsidy or both?," MPRA Paper 52324, University Library of Munich, Germany.
    9. Silva, Andres & Etilé, Fabrice & Boizot-Szantai, Christine & Dharmasena, Senarath, 2013. "The Impact of Beverage Taxes on Quantity and Quality of Consumption in France," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150428, Agricultural and Applied Economics Association.
    10. Miao, Zhen, 2012. "Three essays on tax policies addressing the obesity epidemic and associated calorie intake," ISU General Staff Papers 201201010800003415, Iowa State University, Department of Economics.
    11. Zhen Miao & John C. Beghin & Helen H. Jensen, 2013. "Accounting For Product Substitution In The Analysis Of Food Taxes Targeting Obesity," Health Economics, John Wiley & Sons, Ltd., vol. 22(11), pages 1318-1343, November.
    12. Finkelstein, Eric A. & Zhen, Chen & Bilger, Marcel & Nonnemaker, James & Farooqui, Assad M. & Todd, Jessica E., 2013. "Implications of a sugar-sweetened beverage (SSB) tax when substitutions to non-beverage items are considered," Journal of Health Economics, Elsevier, vol. 32(1), pages 219-239.
    13. Rhodes, Charles, 2012. "A Dynamic Model of Failure to Maximize Utility in the Chronic Consumer Choice to Consume Foods High in Added Sugars," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124693, Agricultural and Applied Economics Association.
    14. Bonnet, Céline & Réquillart, Vincent, 2013. "Tax incidence with strategic firms in the soft drink market," Journal of Public Economics, Elsevier, vol. 106(C), pages 77-88.
    15. Thavorncharoensap, Montarat, 2017. "Effectiveness of Obesity Prevention and Control," ADBI Working Papers 654, Asian Development Bank Institute.
    16. Colantuoni, Francesca & Rojas, Christian, 2012. "Have soda sales tax effects changed over time? Scanner data comparison analyses," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124806, Agricultural and Applied Economics Association.
    17. Maria Eugenia Bonilla-Chacin & Roberto Magno Iglesias & Agustina Sara Suaya & Claudia Trezza & Claudia Macias, 2016. "Learning from the Mexican Experience with Taxes on Sugar-Sweetened Beverages and Energy-dense Foods of Low Nutritional Value: Poverty and Social Impact Analysis," Health, Nutrition and Population (HNP) Discussion Paper Series 106595, The World Bank.
    18. Wada, Roy & Han, Euna & Powell, Lisa M., 2015. "Associations between soda prices and intake: Evidence from 24-h dietary recall data," Food Policy, Elsevier, vol. 55(C), pages 54-60.
    19. Charles L. Baum & Shin-Yi Chou, 2016. "Why has the prevalence of obesity doubled?," Review of Economics of the Household, Springer, vol. 14(2), pages 251-267, June.
    20. Charles L. Baum & Shin-Yi Chou, 2011. "The Socio-Economic Causes of Obesity," NBER Working Papers 17423, National Bureau of Economic Research, Inc.
    21. Okrent, Abigail M. & MacEwan, Joanna P., 0. "The Effects of Prices, Advertising, Expenditures, and Demographics on Demand for Nonalcoholic Beverages," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association.
    22. Okrent, Abigail M. & MacEwan, Joanna P., 2014. "The Effects of Prices, Advertising, Expenditures, and Demographics on Demand for Nonalcoholic Beverages," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 43(1), April.
    23. John Creedy, 2016. "Sugar Taxes and Changes in Total Calorie Consumption: A Simple Framework," Treasury Working Paper Series 16/06, New Zealand Treasury.
    24. Hahn, William F. & Davis, Christopher G., 2014. "Costs of Taxing Sodium: A Lunch Meat Application," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 17(A).
    25. Bradbear, Catherine & Friel, Sharon, 2013. "Integrating climate change, food prices and population health," Food Policy, Elsevier, vol. 43(C), pages 56-66.

    More about this item

    Keywords

    Sugar-sweetened beverages (SSB); soft drinks; soda tax; added sugars; obesity; and beverage demand; Food Consumption/Nutrition/Food Safety; Health Economics and Policy;

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