An Analysis of Beverage Size Restrictions

45 Pages Posted: 10 Jun 2019

See all articles by Brian Bourquard

Brian Bourquard

Ernst & Young

Steven Y. Wu

Purdue University - College of Agriculture; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 2019

Abstract

Due to high levels of obesity, various government interventions have been proposed to curb the consumption of sugar-sweetened beverages (SSBs). The New York City "soda-ban," which proposed to limit the size of SSBs is among the most well-known and controversial. While public debates about beverage-size-restrictions tend to focus on how consumers are impacted, we use a nonlinear pricing model to show that, for all but extremely tight restrictions, consumer welfare would be unaffected by an enforceable restriction. However, sellers' profit would decline. While consumption is predicted to decline overall, the magnitude of the decline will vary by consumer segment.

Keywords: beverage size restrictions, health economics, nonlinear pricing, obesity, soda bans, sugar consumption

JEL Classification: D82, I18, I31

Suggested Citation

Bourquard, Brian and Wu, Steven Y., An Analysis of Beverage Size Restrictions (May 2019). IZA Discussion Paper No. 12376, Available at SSRN: https://ssrn.com/abstract=3401144 or http://dx.doi.org/10.2139/ssrn.3401144

Brian Bourquard (Contact Author)

Ernst & Young

710 Bausch and Lomb Pl
Rochester, NY 14604
United States

Steven Y. Wu

Purdue University - College of Agriculture ( email )

United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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