Economics at your fingertips  

The impact of the Cook County, IL, Sweetened Beverage Tax on beverage prices

Lisa M. Powell, Julien Leider and Pierre Thomas Léger

Economics & Human Biology, 2020, vol. 37, issue C

Abstract: This study assessed the extent to which the Cook County, IL, Sweetened Beverage Tax (SBT) of one cent per ounce (oz) on sugar-sweetened and artificially sweetened beverages was passed on to consumers in the form of higher prices. We drew on universal product code-level store scanner data and used a pre-post intervention-comparison site difference-in-differences (DID) study design to estimate the impact of the Cook County SBT on prices of taxed beverages, across product categories and sizes, as well as on prices of untaxed beverages. The DID model results showed an over-shifting of the tax with a 119% pass-through rate, on average, across all taxed beverages in Cook County compared to its comparison site. This price change represented, on average, a 34% increase in prices of taxed beverages. For untaxed beverages, prices were estimated to increase slightly by 0.04 cents per oz driven mainly by an increase in milk prices (0.12 cents per oz). We also found some heterogeneity in tax pass-through for the taxed beverages by sweetened beverage product category and size with pass-through being higher, on average, for individual-size (126%) compared to family-size (117%) beverages and higher for energy drinks (145%) compared to other sweetened beverages. Based on the baseline prices of different categories and sizes of beverages, the effective percentage increase in beverage prices resulting from the Cook County SBT ranged from a 52% increase for family-size soda to a 10% increase for family-size energy drinks.

Keywords: Sweetened beverage tax; Tax pass-through; Tax policy; Fiscal policy (search for similar items in EconPapers)
JEL-codes: I12 I18 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.ehb.2020.100855

Access Statistics for this article

Economics & Human Biology is currently edited by J. Komlos, Inas R Kelly and Joerg Baten

More articles in Economics & Human Biology from Elsevier
Bibliographic data for series maintained by Haili He ().

Page updated 2020-12-26
Handle: RePEc:eee:ehbiol:v:37:y:2020:i:c:s1570677x19302230