Getting sugar back? Soda taxes beyond sodas

Abstract

Soda taxes are being implemented in several cities across the US with the aim of reducing sugar intake from sugar sweetened beverages (SSBs). Sugar is linked to obesity and to higher risk of diabetes and cardiovascular conditions, and sodas as the main source are targeted with these taxes. In presence of potential substitutes, the policy can be undermined by consumers changing their sources of sugar. We examine the heterogeneous effects of the Philadelphia soda tax on purchases of other foods considered traditional sources of sugar. The tax was introduced in 2017, following Berkeley, which implemented its own in 2015. We present the first empirical evaluation article focusing on the potential substitution towards additional sugary foods listed as the main sources of sugar intake by the American Heart Association. We compare the consumption of SSB and sugary foods prior to and following the 2017 SSB tax in Philadelphia as well as in the comparable localities. We find an uptake in sugar consumption from sweetened foods of about 3.5% following the introduction of the tax. While this seems small, once compared to the change in sugar intake from beverages, the substitution offsets between 15% to 27% of the total effect of the policy.

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