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Sugar-Sweetened Beverage Demand and Tax Simulation for Federal Food Assistance Participants: A Case of Two New England States.
Appl Health Econ Health Policy. 2018 Aug; 16(4):549-558.AH

Abstract

BACKGROUND

Excessive consumption of sugar-sweetened beverages is a major concern in the efforts to improve diet and reduce obesity in USA, particularly among low-income populations. One of the most commonly proposed strategies to reduce sugar-sweetened beverage consumption is increasing beverage prices through taxation.

OBJECTIVE

The objective of this study was to evaluate whether and how price-based policies could reduce sugar-sweetened beverage consumption among participants in the federal Supplemental Nutrition Assistance Program.

METHODS

Using point-of-sale data from a regional supermarket chain (58 stores), we estimated the responsiveness of demand to sugar-sweetened beverage price changes among Supplemental Nutrition Assistance Program-participating families with young children. Own-price and cross-price elasticities for non-alcoholic beverages were estimated using a Quadratic Almost Ideal Demand System model.

RESULTS

The study found evidence that a tax-induced sugar-sweetened beverage price increase would reduce total sugar-sweetened beverage purchases among Supplemental Nutrition Assistance Program participants, who were driven by purchase shifts away from taxed sodas and sports drinks to non-taxed beverages (bottled water, juice, milk). The substitution of non-taxed caloric beverages decreases the marginal effects of the sugar-sweetened beverage tax, yet the direct tax effects are large enough to reduce the overall caloric intake, with the average net reduction in monthly calories from sugar-sweetened beverages estimated at around 8% for a half-cent per ounce tax and 16% for a one cent per ounce tax.

CONCLUSION

A beverage price increase in the form of an excise tax would reduce sugar-sweetened beverage consumption and increase healthier beverage purchases among low-income families.

Authors+Show Affiliations

World Bank, Bangkok, 10330, Thailand. theepakorn@worldbank.org.Rudd Center for Food Policy and Obesity, University of Connecticut, Hartford, CT, USA. Department of Agricultural and Resource Economics, University of Connecticut, Storrs, CT, USA.

Pub Type(s)

Journal Article

Language

eng

PubMed ID

29916153

Citation

Jithitikulchai, Theepakorn, and Tatiana Andreyeva. "Sugar-Sweetened Beverage Demand and Tax Simulation for Federal Food Assistance Participants: a Case of Two New England States." Applied Health Economics and Health Policy, vol. 16, no. 4, 2018, pp. 549-558.
Jithitikulchai T, Andreyeva T. Sugar-Sweetened Beverage Demand and Tax Simulation for Federal Food Assistance Participants: A Case of Two New England States. Appl Health Econ Health Policy. 2018;16(4):549-558.
Jithitikulchai, T., & Andreyeva, T. (2018). Sugar-Sweetened Beverage Demand and Tax Simulation for Federal Food Assistance Participants: A Case of Two New England States. Applied Health Economics and Health Policy, 16(4), 549-558. https://doi.org/10.1007/s40258-018-0399-1
Jithitikulchai T, Andreyeva T. Sugar-Sweetened Beverage Demand and Tax Simulation for Federal Food Assistance Participants: a Case of Two New England States. Appl Health Econ Health Policy. 2018;16(4):549-558. PubMed PMID: 29916153.
* Article titles in AMA citation format should be in sentence-case
TY - JOUR T1 - Sugar-Sweetened Beverage Demand and Tax Simulation for Federal Food Assistance Participants: A Case of Two New England States. AU - Jithitikulchai,Theepakorn, AU - Andreyeva,Tatiana, PY - 2018/6/20/pubmed PY - 2019/8/29/medline PY - 2018/6/20/entrez SP - 549 EP - 558 JF - Applied health economics and health policy JO - Appl Health Econ Health Policy VL - 16 IS - 4 N2 - BACKGROUND: Excessive consumption of sugar-sweetened beverages is a major concern in the efforts to improve diet and reduce obesity in USA, particularly among low-income populations. One of the most commonly proposed strategies to reduce sugar-sweetened beverage consumption is increasing beverage prices through taxation. OBJECTIVE: The objective of this study was to evaluate whether and how price-based policies could reduce sugar-sweetened beverage consumption among participants in the federal Supplemental Nutrition Assistance Program. METHODS: Using point-of-sale data from a regional supermarket chain (58 stores), we estimated the responsiveness of demand to sugar-sweetened beverage price changes among Supplemental Nutrition Assistance Program-participating families with young children. Own-price and cross-price elasticities for non-alcoholic beverages were estimated using a Quadratic Almost Ideal Demand System model. RESULTS: The study found evidence that a tax-induced sugar-sweetened beverage price increase would reduce total sugar-sweetened beverage purchases among Supplemental Nutrition Assistance Program participants, who were driven by purchase shifts away from taxed sodas and sports drinks to non-taxed beverages (bottled water, juice, milk). The substitution of non-taxed caloric beverages decreases the marginal effects of the sugar-sweetened beverage tax, yet the direct tax effects are large enough to reduce the overall caloric intake, with the average net reduction in monthly calories from sugar-sweetened beverages estimated at around 8% for a half-cent per ounce tax and 16% for a one cent per ounce tax. CONCLUSION: A beverage price increase in the form of an excise tax would reduce sugar-sweetened beverage consumption and increase healthier beverage purchases among low-income families. SN - 1179-1896 UR - https://www.unboundmedicine.com/medline/citation/29916153/Sugar_Sweetened_Beverage_Demand_and_Tax_Simulation_for_Federal_Food_Assistance_Participants:_A_Case_of_Two_New_England_States_ L2 - https://dx.doi.org/10.1007/s40258-018-0399-1 DB - PRIME DP - Unbound Medicine ER -