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How well targeted are soda taxes?

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  • Dubois, Pierre
  • Griffith, Rachel
  • O'Connell, Martin

Abstract

Soda taxes aim to reduce excessive sugar consumption. Their effectiveness depends on whether they target individuals for whom the harm of consumption is largest. We estimate demand and account for supply-side equilibrium pass-through. We exploit longitudinal data to estimate individual preferences, which allows exible heterogeneity that we relate to a wide array of individual characteristics. We show that soda taxes are effective at targeting young consumers but not individuals with high total dietary sugar; they impose the highest monetary cost on poorer individuals, but are unlikely to be strongly regressive if we account for averted future costs from over consumption.

Suggested Citation

  • Dubois, Pierre & Griffith, Rachel & O'Connell, Martin, 2017. "How well targeted are soda taxes?," TSE Working Papers 17-868, Toulouse School of Economics (TSE), revised Jan 2019.
  • Handle: RePEc:tse:wpaper:32251
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    References listed on IDEAS

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    Cited by:

    1. John Cawley & David Frisvold & Anna Hill & David Jones, "undated". "The Impact of the Philadelphia Beverage Tax on Purchases and Consumption by Adults and Children," Mathematica Policy Research Reports 6b77b831c6ad4cf19d401381e, Mathematica Policy Research.
    2. repec:eee:socmed:v:225:y:2019:i:c:p:98-107 is not listed on IDEAS
    3. Gomo, Charity & Birg, Laura, 2018. "The economic and health impact of a tax on sugar sweetened beverages (SSBs) in South Africa," Center for European, Governance and Economic Development Research Discussion Papers 356, University of Goettingen, Department of Economics.

    More about this item

    Keywords

    preference heterogeneity; discrete choice demand; pass-through; soda tax;

    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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