Oakland’s Sugar-Sweetened Beverage Tax: Impacts on Prices, Purchases and Consumption by Adults and Children

78 Pages Posted: 18 Sep 2019

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); National University of Ireland, Galway (NUIG) - J.E. Cairnes School of Business & Economics; NBER; IZA

David E. Frisvold

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

Anna Hill

Mathematica Policy Research

David Jones

Mathematica Policy Research, Inc.

Date Written: August 21, 2019

Abstract

Several cities in the U.S. have implemented taxes on sugar-sweetened beverages (SSBs) in an attempt to improve public health and raise revenue. On July 1, 2017, Oakland, California introduced a tax of one cent per ounce on SSBs. In this paper, we estimate the impact of the tax on retail prices, product availability, purchases, and child and adult consumption of taxed beverages in Oakland, as well as of potential substitute beverages. We collected data from Oakland stores and their customers and a matched group of stores in surrounding counties and their customers. We collected information in the months prior to the implementation of the tax and again a year later on: (1) prices, (2) purchase information from customers exiting the stores, and (3) a follow-up household survey of adults and child beverage purchases and consumption. We use a difference-in-differences identification strategy to estimate the impact of the tax on prices, purchases, and consumption of taxed beverages. We find that roughly 60 percent of the tax was passed on to consumers in the form of higher prices. There was a slight decrease in the volume of SSBs purchased per shopping trip in Oakland and a small increase in purchases at stores outside of the city, and we find some evidence of increased shopping by Oakland residents at stores outside of the city. We do not find evidence of substantial changes in the overall consumption of SSBs or of added sugars consumed through beverages for either adults or children after the tax.

Keywords: taxes, sugar-sweetened beverages, soda, consumption

JEL Classification: H71, H75, I18

Suggested Citation

Cawley, John and Frisvold, David E. and Hill, Anna and Jones, David, Oakland’s Sugar-Sweetened Beverage Tax: Impacts on Prices, Purchases and Consumption by Adults and Children (August 21, 2019). Available at SSRN: https://ssrn.com/abstract=3450705 or http://dx.doi.org/10.2139/ssrn.3450705

John Cawley

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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National University of Ireland, Galway (NUIG) - J.E. Cairnes School of Business & Economics ( email )

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IZA ( email )

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David E. Frisvold (Contact Author)

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/

Anna Hill

Mathematica Policy Research ( email )

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David Jones

Mathematica Policy Research, Inc. ( email )

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Cambridge, MA 02139
United States
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