The Impact of Four Alternative Policies to Decrease Soda Consumption

Yizao Liu, Rigoberto Lopez and Chen Zhu

Agricultural and Resource Economics Review, 2014, vol. 43, issue 1, 53-68

Abstract: We examine the impact of four policy options on consumption of carbonated soft drinks (CSDs) by estimating a random-coefficient discrete-choice model of demand. Policy simulations using demand estimates indicate that the impacts of banning television advertising, limiting container size, and limiting calories on total consumption would be similar—an estimated 15.40–15.75 percent reduction. However, limiting calories would have a significantly greater impact on consumption of regular CSDs (–28.89 percent) and on calories consumed from CSDs (–19.34 percent). A tax on calories was least effective in curtailing overall consumption and consumption of regular CSDs.

Date: 2014
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