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  5. Evaluating the Medium- and Longer-Term Health and Economic Impacts of Sugar-Sweetened Beverage Taxes
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Evaluating the Medium- and Longer-Term Health and Economic Impacts of Sugar-Sweetened Beverage Taxes

Paper Session

Friday, Jan. 5, 2024 12:30 PM - 2:15 PM (CST)

Grand Hyatt, Mission B
Hosted By: Agricultural and Applied Economics Association
  • Chair: Scott Kaplan, United States Naval Academy

Using Electronic Health Records to Estimate the Association Between Seattle’s Sweetened Beverage Tax and Weight Gain Trajectories in Adults and Children

Melissa Knox
,
University of Washington
Jessica Jones-Smith
,
University of Washington
Jessica Godwin
,
University of Washington
Steve Mooney
,
University of Washington

Abstract

City-level sweetened beverage taxes have emerged as a policy response to rising rates of obesity and associated chronic disease outcomes in the U.S. Research has found that these taxes raise prices and reduce sales of taxed beverages within the taxed cities; however, these findings do not necessarily imply tax impacts on sugar intake in affected households. In this paper, we look for evidence of sweetened beverage tax impacts on overall dietary intake of sugar by examining trends in Body Mass Index (BMI) growth in Seattle before and after the introduction of that city’s Sweetened Beverage Tax in 2018. Using electronic health records from two major medical systems in Washington State, we analyze medical records from 2014 to 2019 for 98,000 adult patients and 24,000 child patients to estimate the association between the introduction of Seattle’s Sweetened Beverage Tax in 2018 with the change in BMI growth among Seattle residents aged 2 to 65. For adults, we estimate changes in BMI growth, and for children, we estimate changes in BMI expressed as a fraction of the 95th percentile BMI-for-age. We employ both probability matching and weighting and “synthetic difference in differences” (Arkhangelsky et a. 2021) to estimate post-tax changes in these outcomes in Seattle patients relative to changes in a comparison group of patients residing in surrounding counties over the same time period. We find small, but statistically significant post-tax decreases in BMI trajectory in both adults and children in our sample. For adults, our estimates suggest an effect size of approximately 0.4 pounds less weight gain among Seattle patients per year, after the tax. For children, we estimate a -0.01 decline in BMI relative to the age-adjusted 95th BMI percentile. This estimate corresponds to a decline in BMI of 0.23 kg/m2 for a 10-year-old girl, for example.

Searching for the Long-Term Consequences of Soda Taxes: Changes in Soda and Sugar Purchases for Families with Children

Felipe Lozano-Rojas
,
University of Georgia

Abstract

Following the introduction of soda taxes, large decreases in consumption of sodas have been documented across US cities, however, most of the evidence has been centered in overall consumption patterns with only a few exceptions focusing on heterogeneous characteristics of consumers. Previous experience with tobacco suggests that the-long term consequences of discouraged consumption where more profound as younger consumers were prevented from developing a smoking habit. In this study, we explore whether this is the case with soda taxes. I leverage information from the HomeScan Panel dataset provided by Nielsen, which follows more than 60,000 households every year along the continental US, to evaluate the heterogeneous effects of SSB taxes enacted in different US cities across different households by presence of children and level of income. We estimate a two-way fixed effect difference in differences model where we evaluate heterogeneous effects across households by income level and whether or not they have children. We compare these results with recent difference-in-differences models that consider staggered adoption (Callaway and Sant’Anna, 2020). The results of this study will provide some of the first evidence on the long-term effects of enacting soda taxes on different types of households, and discuss habit formation from reduced soda availability in families with children.

Evaluation of changes in prices and purchases following implementation of sugar-sweetened beverage taxes across the United States

Scott Kaplan
,
United States Naval Academy
Justin White
,
University of California-San Francisco
Kristine Madsen
,
University of California-Berkeley
Sofia Villas-Boas
,
University of California-Berkeley
Dean Schillinger
,
University of California-San Francisco

Abstract

Because of evidence regarding the adverse health impacts of added sugar, excise taxes on sugar-sweetened beverages (SSBs) have become more common, with more than 50 countries having implemented some form of an SSB tax as of May 2022. In 2021, a federal commission on diabetes recommended implementation of a nation-wide SSB tax to control and reduce incidence of diabetes (National Clinical Care Commission 2021). Yet, nearly all U.S-based studies focus on a single taxed city. Identifying the composite effect of SSB taxes is an important gap towards a better understanding of responsiveness of different sub-populations, especially considering the wide range of impacts of SSB taxes in different localities. We use retail sales data from five taxed cities in the US and a staggered adoption bias-corrected synthetic control approach (Ben-Michael et al. 2021) to extend these analyses by jointly estimating the composite effect of SSB taxes on SSB prices and volume purchased. We find SSB volume purchases declined by an average of 33.0% and shelf prices of SSB products increased by an average of 33.1% in the months following implementation of a tax, corresponding to an average price increase of 1.3 cents per ounce and a price pass-through rate of 92%. These estimates imply a price elasticity of demand of -1.00, suggesting that purchasing behavior of SSBs has been relatively responsive to changes in shelf prices. Our findings have important implications for the potential efficacy of SSB taxes in larger geographic jurisdictions, and even at the nationwide level.

Discussant(s)
Dan Goetz
,
University of Toronto
David Frisvold
,
University of Iowa
Jacob Whitman
,
Wayne State University
JEL Classifications
  • I1 - Health
  • H3 - Fiscal Policies and Behavior of Economic Agents