Taxing Caloric Sweetened Beverages: Potential Effects on Beverage Consumption, Calorie Intake, and Obesity

33 Pages Posted: 8 Aug 2012

See all articles by Travis Smith

Travis Smith

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Biing-Hwan Lin

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Jong-Ying Lee

affiliation not provided to SSRN

Date Written: July 1, 2010

Abstract

The link between high U.S. obesity rates and the over consumption of added sugars, largely from sodas and fruit drinks, has prompted public calls for a tax on caloric sweetened beverages. Faced with such a tax, consumers may reduce consumption of these sweetened beverages and substitute nontaxed beverages, such as bottled water, juice, and milk. This study estimated that a tax-induced 20-percent price increase on caloric sweetened beverages could cause an average reduction of 37 calories per day, or 3.8 pounds of body weight over a year, for adults and an average of 43 calories per day, or 4.5 pounds over a year, for children. Given these reductions in calorie consumption, results show an estimated decline in adult overweight prevalence (66.9 to 62.4 percent) and obesity prevalence (33.4 to 30.4 percent), as well as the child at-risk-for-overweight prevalence (32.3 to 27.0 percent) and the overweight prevalence (16.6 to 13.7 percent). Actual impacts would depend on many factors, including how the tax is reflected in consumer prices and the competitive strategies of beverage manufacturers and food retailers.

Keywords: Sugar-sweetened beverages (SSB), soft drinks, soda tax, added sugars, obesity, and beverage demand

Suggested Citation

Smith, Travis and Lin, Biing-Hwan and Lee, Jong-Ying, Taxing Caloric Sweetened Beverages: Potential Effects on Beverage Consumption, Calorie Intake, and Obesity (July 1, 2010). USDA-ERS Economic Research Report No. 100. Available at SSRN: https://ssrn.com/abstract=2118636 or http://dx.doi.org/10.2139/ssrn.2118636

Travis Smith

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

355 E Street, SW
Washington, DC 20024-3221
United States

Biing-Hwan Lin (Contact Author)

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
(202) 694-5958 (Phone)

Jong-Ying Lee

affiliation not provided to SSRN

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