EconPapers    
Economics at your fingertips  
 

Would A National Sugar‐Sweetened Beverage Tax in the United States Be Well Targeted?

Pourya Valizadeh and Shu Wen Ng

American Journal of Agricultural Economics, 2021, vol. 103, issue 3, 961-986

Abstract: Sugar‐sweetened beverage (SSB) taxes have been proposed to discourage excessive sugar consumption, but it is unclear how high‐ versus low‐SSB purchasers respond to such taxes. We first examine heterogeneity in the purchase and financial effects of a national SSB tax across different types of households buying varying amounts of SSBs. We find high‐SSB purchasers are less responsive to SSB price changes than low purchasers but make larger absolute reductions in SSB purchases in response to the tax, given their notably greater purchase levels prior to the tax. Nonetheless, the economic burden of the tax falls more heavily on high‐SSB purchasers who are more likely composed of lower income households. We then investigate whether the income regressivity of the tax will be mitigated if low‐income households are targeted by fruit and vegetable (FV) subsidies. We show that depending on the tax pass‐through and subsidy rates, FV subsidies can fully offset high‐SSB purchasers’ tax burdens, and subsidy transfers are distributed relatively uniformly across the SSB purchase distribution of low‐income households. Therefore, FV subsidy transfers would be financially more beneficial to low‐ and moderate‐SSB purchasers because they bear smaller shares of the tax burden than high‐SSB purchasers.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/ajae.12190

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: https://EconPapers.repec.org/RePEc:wly:ajagec:v:103:y:2021:i:3:p:961-986

Access Statistics for this article

More articles in American Journal of Agricultural Economics from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2021-05-12
Handle: RePEc:wly:ajagec:v:103:y:2021:i:3:p:961-986