An Economic Analysis of Beverage Size Restrictions

Brian Bourquard and Steven Wu

No 235691, 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts from Agricultural and Applied Economics Association

Abstract: We model the potential efficiency and distributional consequences of a government beverage-size restriction that is designed to curb or reduce consumption of sugar-sweetened beverages. Unsurprisingly, we find that a credibly implemented restriction can curb consumption, particularly by “high-type” consumers who consume large amounts of sweetened beverages. Surprisingly, we find that for small to moderate restrictions that might be consistent with the magnitude of the NYC soda-ban, consumer welfare will be unaffected by the regulation. Instead, most consumption inefficiency induced welfare losses will be borne by sellers. Thus, policy debates concerning welfare losses from soft-drink sales should focus on business losses rather than consumer welfare losses.

Keywords: Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety; Health Economics and Policy; Industrial Organization (search for similar items in EconPapers)
Pages: 39
Date: 2016-07
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea16:235691

DOI: 10.22004/ag.econ.235691

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