Implications of a Sugar Tax in New Zealand: Incidence and Effectiveness

Alasdair Gardiner ()
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Alasdair Gardiner: Ministry of Business, Innovation and Employment, http://www.mbie.govt.nz

No 16/09, Treasury Working Paper Series from New Zealand Treasury

Abstract: This paper has two aims. First, it surveys some of the literature on the likely effectiveness of sugar taxes as a policy instrument for reducing morbidity and mortality associated with obesity. There is a wide range of estimates among the literature of the price elasticity of demand for sugary products. A plurality of studies found that groups most at risk from obesity have greater price sensitivity. Studies also found there is a risk of consumers substituting unhealthy but non-taxed products for taxed products, negating any potential health improvements from a tax. The paper's second aim is to build on the literature review by analysing the possible incidence of a sugar tax in New Zealand, based on New Zealand household expenditure data. The empirical analysis presented is consistent with international evidence that a sugar tax would be regressive at the general population level.

Keywords: Sugar sweetened beverages; tax progressivity (search for similar items in EconPapers)
JEL-codes: H2 H3 (search for similar items in EconPapers)
Pages: 26
Date: 2016-12
New Economics Papers: this item is included in nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:nzt:nztwps:16/09

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