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How well targeted are soda taxes?

Author

Listed:
  • Pierre Dubois

    (Institute for Fiscal Studies and Toulouse School of Economics)

  • Rachel Griffith

    (Institute for Fiscal Studies and University of Manchester)

  • Martin O'Connell

    (Institute for Fiscal Studies and University of Wisconsin)

Abstract

Soda taxes aim to reduce excessive sugar consumption. Policymakers highlight the young, particularly from poor backgrounds, and high sugar consumers as groups whose behavior they would most like to influence. There are also concerns about the policy being regressive. We assess who are most impacted by soda taxes. We estimate demand using micro longitudinal data covering on-the-go purchases, and exploit the panel dimension to estimate individual specific preferences. We relate these preferences and counterfactual predictions to individual characteristics and show that soda taxes are relatively effective at targeting the sugar intake of the young, are less successful at targeting the intake of those with high total dietary sugar, and are unlikely to be strongly regressive especially if consumers benefit from averted internalities.

Suggested Citation

  • Pierre Dubois & Rachel Griffith & Martin O'Connell, 2020. "How well targeted are soda taxes?," IFS Working Papers W20/8, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:20/8
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    File URL: https://www.ifs.org.uk/uploads/WP2008-How-well-targeted-are-soda-taxes.pdf
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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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