From Coke to Coors: A Field Study of a Fat Tax and Its Unintended Consequences

Abstract

Could taxes on soft drinks reduce obesity? To examine this, a six-month field experiment was conducted in a small American city where half of the households faced a 10% tax and half did not. The 10% tax resulted in a short-term (1-month) decrease in soft drink purchases, but there was no decrease in purchases over a 3-month or 6-month period. Moreover, in beer-purchasing households, this tax led to increased purchases of beer.

Keywords: Sugar-sweetened beverage, soft drinks, tax, substitution, obesity, beer, unintended consequences

JEL Classification: D10, H31, I18