The Pass-Through of the Largest Tax on Sugar-Sweetened Beverages: The Case of Boulder, Colorado

35 Pages Posted: 17 Sep 2018 Last revised: 12 Jun 2023

See all articles by John Cawley

John Cawley

Cornell University - College of Human Ecology, Department of Policy Analysis & Management (PAM); Cornell University - College of Arts & Sciences, Department of Economics; Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); University of Galway - J.E. Cairnes School of Business & Economics; NBER; IZA

Chelsea Crain

University of Iowa

David E. Frisvold

University of Iowa - Henry B. Tippie College of Business - Department of Economics

David Jones

Mathematica Policy Research, Inc.

Date Written: September 2018

Abstract

We estimate the incidence of a relatively new type of excise tax, a tax on sugar-sweetened beverages (SSBs). We examine the largest such tax to date, which is two cents per ounce, in Boulder, CO. Using data that were hand-collected from stores and restaurants in both Boulder and two control communities, as well as internet data of restaurant menus, we find that the tax was largely, but not completely, passed through to consumers 5-7 weeks after implementation. Some retailers add the tax only at the register, indicating that estimates solely from posted prices would result in an underestimate of pass-through.

Suggested Citation

Cawley, John and Crain, Chelsea and Frisvold, David E. and Jones, David, The Pass-Through of the Largest Tax on Sugar-Sweetened Beverages: The Case of Boulder, Colorado (September 2018). NBER Working Paper No. w25050, Available at SSRN: https://ssrn.com/abstract=3250596

John Cawley (Contact Author)

Cornell University - College of Human Ecology, Department of Policy Analysis & Management (PAM) ( email )

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Cornell University - College of Arts & Sciences, Department of Economics ( email )

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University of Galway - J.E. Cairnes School of Business & Economics ( email )

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IZA ( email )

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Chelsea Crain

University of Iowa

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David E. Frisvold

University of Iowa - Henry B. Tippie College of Business - Department of Economics ( email )

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HOME PAGE: http://www.biz.uiowa.edu/frisvold/

David Jones

Mathematica Policy Research, Inc. ( email )

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