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A reconsideration of the sugar sweetened beverage tax in a household production model

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  • Xiang, Di
  • Zhan, Lue
  • Bordignon, Massimo

Abstract

We study the impact of a hypothetical tax on sugar - sweetened beverages (SSBs) on the U.S. households’ nutrients purchase, welfare change, and health benefit. Differently from the traditional approach, Food at Home (FAH) is here defined as a “home” good instead of a market good and consumers’ demands derived under the assumption that households maximize utility subject to both a money and a time constraint. The model is estimated by using an incomplete approximate Exact Affine Stone Index (EASI) demand system on a data set built by merging the U.S. consumer expenditure and time use surveys. Results show that a SSB tax would be much more effective in decreasing household nutrients purchase than it would appear by estimating a model neglecting time costs in home food production, due to a lesser compensation of calories from increasing FAH consumption. A tax-induced 38% increase in SSB price is predicted to decrease the per capita energy purchase by 41 kcal/day.

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  • Xiang, Di & Zhan, Lue & Bordignon, Massimo, 2020. "A reconsideration of the sugar sweetened beverage tax in a household production model," Food Policy, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:jfpoli:v:95:y:2020:i:c:s0306919220301378
    DOI: 10.1016/j.foodpol.2020.101933
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    More about this item

    Keywords

    Sugar-sweetened beverage tax; Obesity; Household production;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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