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Heterogeneous behavior, obesity and storability in soft drink consumption: A dynamic demand model

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  • Colantuoni, Francesca
  • Rojas, Christian

Abstract

In this paper we applied a dynamic estimation procedure to inves-tigate the role of obesity on the demand for soda. The dynamic model accounts for storing behaviors, and allowed us to study price sensitiv-ity as well as sale sensitivity of soda consumers. By matching store level data to obesity data, we considered the effect of obesity rates on soda demand. We found that higher obesity rates were associated with a higher attitude to anticipate future needs and respond to sale prices. Conversely, according to our results, a higher rate of obesity was also associated to lower price sensitivity. We also considered how some obesity predictors affected the demand for soda. Our results contribute to the existing literature by raising important elements to help establish correct policies to fight obesity. For instance, our re-search suggests that a policy intervention restricting the magnitude of sales would be more successful than a tax increase in modifying the behavior of obese consumers.

Suggested Citation

  • Colantuoni, Francesca & Rojas, Christian, 2013. "Heterogeneous behavior, obesity and storability in soft drink consumption: A dynamic demand model," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 257244, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea13:257244
    DOI: 10.22004/ag.econ.257244
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    References listed on IDEAS

    as
    1. Igal Hendel & Aviv Nevo, 2006. "Measuring the Implications of Sales and Consumer Inventory Behavior," Econometrica, Econometric Society, vol. 74(6), pages 1637-1673, November.
    2. Igal Hendel & Aviv Nevo, 2006. "Sales and consumer inventory," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 543-561, September.
    3. Jason M. Fletcher & David Frisvold & Nathan Tefft, 2010. "Can Soft Drink Taxes Reduce Population Weight?," Contemporary Economic Policy, Western Economic Association International, vol. 28(1), pages 23-35, January.
    4. Fletcher, Jason, 2011. "Soda Taxes and Substitution Effects: Will Obesity be Affected?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 26(3), pages 1-4, October.
    5. Colantuoni, Francesca & Rojas, Christian, 2012. "Have soda sales tax effects changed over time? Scanner data comparison analyses," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124806, Agricultural and Applied Economics Association.
    6. Vartanian, L.R. & Schwartz, M.B. & Brownell, K.D., 2007. "Effects of soft drink consumption on nutrition and health: A systematic review and meta-analysis," American Journal of Public Health, American Public Health Association, vol. 97(4), pages 667-675.
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    9. Block, J.P. & Chandra, A. & McManus, K.D. & Willett, W.C., 2010. "Point-of-purchase price and education intervention to reduce consumption of sugary soft drinks," American Journal of Public Health, American Public Health Association, vol. 100(8), pages 1427-1433.
    10. Fletcher, Jason M. & Frisvold, David E. & Tefft, Nathan, 2010. "The effects of soft drink taxes on child and adolescent consumption and weight outcomes," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 967-974, December.
    11. Lin, Biing-Hwan & Smith, Travis A. & Lee, Jonq-Ying, 2010. "The Effects of a Sugar-Sweetened Beverage Tax: Consumption, Calorie Intake, Obesity, and Tax Burden by Income," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61167, Agricultural and Applied Economics Association.
    12. Senarath Dharmasena & Oral Capps, 2012. "Intended and unintended consequences of a proposed national tax on sugar‐sweetened beverages to combat the U.S. obesity problem," Health Economics, John Wiley & Sons, Ltd., vol. 21(6), pages 669-694, June.
    13. Igal Hendel & Aviv Nevo, 2006. "Sales and Consumer Inventory," RAND Journal of Economics, The RAND Corporation, vol. 37(3), pages 543-561, Autumn.
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