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The effect of soda taxes beyond beverages in Philadelphia

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  • Felipe Lozano‐Rojas
  • Patrick Carlin

Abstract

Soda taxes are implemented in several cities across the United States (US) with the aim of reducing sugar intake from sugar sweetened beverages (SSBs). Sugar is linked to obesity and to higher risk of diabetes and cardiovascular conditions. Sodas are targeted with these taxes since they are the main source of sugar for consumers in the US. In presence of potential substitutes, the policy can be undermined by consumers changing their sources of sugar. We examine the heterogeneous effects of the 2017 Philadelphia soda tax on purchases of other items containing sugar. We present an empirical evaluation focusing on the potential substitution toward additional sugary foods in Philadelphia and counties bordering Philadelphia. We find an increase in sugar from purchases of sweetened foods of about 4.3% following the introduction of the tax in Philadelphia and of 3.7% in the neighboring localities. The substitution to sugary foods in Philadelphia offsets 19% of the decrease of sugar from SSBs. Additionally, we find that the substitution offsets 37% of the decrease of sugar from SSBs when including counties bordering Philadelphia. These results suggest that while SSB taxes might be effective at lowering consumption of SSBs, substitution patterns may limit the effectiveness of the tax to reduce overall sugar intake.

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  • Felipe Lozano‐Rojas & Patrick Carlin, 2022. "The effect of soda taxes beyond beverages in Philadelphia," Health Economics, John Wiley & Sons, Ltd., vol. 31(11), pages 2381-2410, November.
    • Handle: RePEc:wly:hlthec:v:31:y:2022:i:11:p:2381-2410
    DOI: 10.1002/hec.4586
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    2. Pan, Yuxuan & Fan, Linlin & Goetz, Stephan J., 2024. "The Effect of Soda Taxes on Beverage and Candy Purchases," 2024 Annual Meeting, July 28-30, New Orleans, LA 343984, Agricultural and Applied Economics Association.

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