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Brown sugar, how come you taste so good? The impact of a soda tax on prices and consumption

Judite Gonçalves () and João Pereira dos Santos

Social Science & Medicine, 2020, vol. 264, issue C

Abstract: Increasing obesity-related problems and rising healthcare expenditures have led governments in developed countries to consider the introduction of soda taxes. We study a recent such tax, implemented in Portugal in February 2017 —one of the first soda taxes worldwide that increases with sugar content (0.08 euros per liter for drinks with less than 80 g of sugar per liter, and 0.16 euros per liter for drinks with 80 g or more sugar per liter, plus VAT). We use extremely detailed panel data from one of the two largest retailers in the country, covering the period between February 2015 and January 2018. We take advantage of the tax breakdown by sugar levels to examine how soda prices and quantities purchased reacted. For identification, we rely on difference-in-differences models with various vectors of fixed effects, comparing each group of products to water.

Keywords: Soda tax; Sugar-sweetened beverages tax; Pass-through; Policy evaluation; Portugal (search for similar items in EconPapers)
JEL-codes: C23 D12 H20 I18 Q18 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.socscimed.2020.113332

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