Article

How well targeted are soda taxes?

Pierre Dubois, Rachel Griffith, and Martin O'Connell

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.

Reference

Pierre Dubois, Rachel Griffith, and Martin O'Connell, How well targeted are soda taxes?, American Economic Review, 2020, forthcoming.

Published in

American Economic Review, 2020, forthcoming