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Impact of SSB taxes on sales

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  • Vall Castelló, Judit
  • Lopez Casasnovas, Guillem

Abstract

In this paper, we analyze a tax on sugar-sweetened beverages (SSB) that was introduced in Catalonia on May 1, 2017. The Bill established the requirement of a 100% pass-through of the tax to the final consumer and two levels of the tax: 0.08 euro/liter for products with 5-less than 8 g of sugar and 0.12 euro/liter for products with 8 g of sugar or more. Previous literature focusing on the impact of SSB taxes finds that pass-though is only complete in the long-term. Our paper provides new evidence that, when the tax increases prices substantially and immediately, the sales response is also significant. In particular, we estimate that the new SSB tax in Catalonia reduced SSB purchases by 7.7%. We document that part of this reduction is substituted by an increase in sales of zero/light drinks (substitution effect). Importantly, the reduction in purchases is stronger in areas with a higher incidence of obesity, in areas with higher household incomes and for products with higher sugar content.

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  • Vall Castelló, Judit & Lopez Casasnovas, Guillem, 2020. "Impact of SSB taxes on sales," Economics & Human Biology, Elsevier, vol. 36(C).
    • Handle: RePEc:eee:ehbiol:v:36:y:2020:i:c:s1570677x19300425
    DOI: 10.1016/j.ehb.2019.100821
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    Cited by:

    1. Schmacker, Renke & Smed, Sinne, 2020. "Do prices and purchases respond similarly to soft drink tax increases and cuts?," Economics & Human Biology, Elsevier, vol. 37(C).
    2. Arpita Mukherjee & Eshana Mukherjee & Aryan Bisoi, 2024. "Carbonated Beverages Industry in India: Tax Policy to Promote Growth, Innovation and Investment," Indian Council for Research on International Economic Relations (ICRIER) Policy Paper 26, Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India.
    3. Elisabeth H.M. Temme & Reina E. Vellinga & Henri de Ruiter & Susanna Kugelberg & Mirjam van de Kamp & Anna Milford & Roberta Alessandrini & Fabio Bartolini & Alberto Sanz-Cobena & Adrian Leip, 2020. "Demand-Side Food Policies for Public and Planetary Health," Sustainability, MDPI, vol. 12(15), pages 1-19, July.
    4. Goncalves, Judite & Merenda, Roxanne & Pereira dos Santos, João, 2023. "Not So Sweet: Impacts of a Soda Tax on Producers," IZA Discussion Papers 15968, Institute of Labor Economics (IZA).
    5. Dal, Eléonore & Morales Opazo, Cristian & Angulo, Arturo & Yagüe, José Luis, "undated". "Fiscal policies to fight malnutrition – An analysis of the sugar-sweetened beverages tax in Catalonia, Spain," ESA Working Papers 319837, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).

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    Keywords

    Sugar-sweetened taxes; Policy evaluation;

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