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How well targeted are soda taxes?

Pierre Dubois (), Rachel Griffith () and Martin O'Connell
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Martin O'Connell: IFS - Laboratory of the Institute for Fiscal Studies - Institute for Fiscal Studies

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Abstract: Soda taxes aim to reduce excessive sugar consumption. Policymakers highlight the young, particularly from poor backgrounds, and high sugar consumers as groups whose behavior they would most like to influence. There are also concerns about the policy being regressive. We assess who are most impacted by soda taxes. We estimate demand using micro longitudinal data covering on-the-go purchases, and exploit the panel dimension to estimate individual specific preferences. We relate these preferences and counterfactual predictions to individual characteristics and show that soda taxes are relatively effective at targeting the sugar intake of the young, are less successful at targeting the intake of those with high total dietary sugar, and are unlikely to be strongly regressive especially if consumers benefit from averted internalities.

Keywords: Preference heterogeneity; Discrete choice demand; Pass-through; Soda tax (search for similar items in EconPapers)
Date: 2020-11
New Economics Papers: this item is included in nep-hea, nep-pbe and nep-pub
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Published in American Economic Review, 2020, 110 (11), pp.3661-3704. ⟨10.1920/wp.ifs.2020.820⟩

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Journal Article: How Well Targeted Are Soda Taxes? (2020) Downloads
Working Paper: How well targeted are soda taxes? (2020) Downloads
Working Paper: How well targeted are soda taxes? (2017) Downloads
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DOI: 10.1920/wp.ifs.2020.820

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