IDEAS home Printed from https://ideas.repec.org/p/chy/respap/131cherp.html
   My bibliography  Save this paper

The impact of taxation and signposting on diet: an online field study with breakfast cereals and soft drinks

Author

Listed:
  • Daniel John Zizzo

    (BENC and Newcastle University, UK)

  • Melanie Parravano

    (BHRU and Newcastle University, UK)

  • Ryota Nakamura

    (Centre for Health Economics, University of York, UK)

  • Suzanna Forwood

    (Anglia Ruskin University, UK)

  • Marc Suhrcke

    (Centre for Health Economics, University of York, UK)

Abstract

We present a large scale study where a nationally representative sample of 1,000 participants were asked to make real purchases within an online supermarket platform. The study captured the effect of price changes, and of the signposting of such changes, for breakfast cereals and soft drinks. We find that such taxes are an effective means of altering food purchasing, with a 20% rate being sufficient to make a significant impact. Signposting represents a complementary nudge policy that could enhance the impact of the tax without imposing severe welfare loss, though the effectiveness may depend on the product category.

Suggested Citation

  • Daniel John Zizzo & Melanie Parravano & Ryota Nakamura & Suzanna Forwood & Marc Suhrcke, 2016. "The impact of taxation and signposting on diet: an online field study with breakfast cereals and soft drinks," Working Papers 131cherp, Centre for Health Economics, University of York.
    • Handle: RePEc:chy:respap:131cherp
    as

    Download full text from publisher

    File URL: http://www.york.ac.uk/media/che/documents/papers/researchpapers/CHERP131_taxation_signposting_diet_breakfast_cereals_soft_drinks.pdf
    File Function: First version, 2016
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jacob Goldin & Tatiana Homonoff, 2013. "Smoke Gets in Your Eyes: Cigarette Tax Salience and Regressivity," American Economic Journal: Economic Policy, American Economic Association, vol. 5(1), pages 302-336, February.
    2. Pierre Dubois & Rachel Griffith & Martin O'Connell, 2020. "How Well Targeted Are Soda Taxes?," American Economic Review, American Economic Association, vol. 110(11), pages 3661-3704, November.
    3. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    4. Davis, Douglas D. & Holt, Charles a., 1993. "Experimental economics: Methods, problems and promise," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 8(2), pages 179-212.
    5. Cox, James C. & Sadiraj, Vjollca, 2006. "Small- and large-stakes risk aversion: Implications of concavity calibration for decision theory," Games and Economic Behavior, Elsevier, vol. 56(1), pages 45-60, July.
    6. Philippe Février & Michael Visser, 2004. "A Study of Consumer Behavior Using Laboratory Data," Experimental Economics, Springer;Economic Science Association, vol. 7(1), pages 93-114, February.
    7. Glenn W. Harrison & Morten I. Lau & Melonie B. Williams, 2002. "Estimating Individual Discount Rates in Denmark: A Field Experiment," American Economic Review, American Economic Association, vol. 92(5), pages 1606-1617, December.
    8. Chen, Xiu & Kaiser, Harry M. & Rickard, Bradley J., 2015. "The impacts of inclusive and exclusive taxes on healthy eating: An experimental study," Food Policy, Elsevier, vol. 56(C), pages 13-24.
    9. Koichiro Ito & James M. Sallee, 2018. "The Economics of Attribute-Based Regulation: Theory and Evidence from Fuel Economy Standards," The Review of Economics and Statistics, MIT Press, vol. 100(2), pages 319-336, May.
    10. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-1177, September.
    11. M Arantxa Colchero & Juan Carlos Salgado & Mishel Unar-Munguía & Mariana Molina & Shuwen Ng & Juan Angel Rivera-Dommarco, 2015. "Changes in Prices After an Excise Tax to Sweetened Sugar Beverages Was Implemented in Mexico: Evidence from Urban Areas," PLOS ONE, Public Library of Science, vol. 10(12), pages 1-11, December.
    12. Eric Johnson & Suzanne Shu & Benedict Dellaert & Craig Fox & Daniel Goldstein & Gerald Häubl & Richard Larrick & John Payne & Ellen Peters & David Schkade & Brian Wansink & Elke Weber, 2012. "Beyond nudges: Tools of a choice architecture," Marketing Letters, Springer, vol. 23(2), pages 487-504, June.
    13. Sugden, Robert & Wang, Mengjie & Zizzo, Daniel John, 2019. "Take it or leave it: Experimental evidence on the effect of time-limited offers on consumer behaviour," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 1-23.
    14. Nicoletta Berardi & Patrick Sevestre & Marine Tépaut & Alexandre Vigneron, 2016. "The impact of a ‘soda tax’ on prices: evidence from French micro data," Applied Economics, Taylor & Francis Journals, vol. 48(41), pages 3976-3994, September.
    15. Nevo, Aviv, 2001. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Econometrica, Econometric Society, vol. 69(2), pages 307-342, March.
    16. Charness, Gary & Gneezy, Uri & Kuhn, Michael A., 2012. "Experimental methods: Between-subject and within-subject design," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 1-8.
    17. Schroeter, Christiane & Lusk, Jayson & Tyner, Wallace, 2008. "Determining the impact of food price and income changes on body weight," Journal of Health Economics, Elsevier, vol. 27(1), pages 45-68, January.
    18. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    19. Dmitry Taubinsky & Alex Rees-Jones, 2018. "Attention Variation and Welfare: Theory and Evidence from a Tax Salience Experiment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(4), pages 2462-2496.
    20. Steffen Andersen & James C. Cox & Glenn W. Harrison & Morten I. Lau & E. Elisabet Rutström & Vjollca Sadiraj, 2018. "Asset Integration and Attitudes toward Risk: Theory and Evidence," The Review of Economics and Statistics, MIT Press, vol. 100(5), pages 816-830, December.
    21. Cawley, John & Frisvold, David & Hill, Anna & Jones, David, 2019. "The impact of the Philadelphia beverage tax on purchases and consumption by adults and children," Journal of Health Economics, Elsevier, vol. 67(C).
    22. Andrea Isoni, 2011. "The willingness-to-accept/willingness-to-pay disparity in repeated markets: loss aversion or ‘bad-deal’ aversion?," Theory and Decision, Springer, vol. 71(3), pages 409-430, September.
    23. Laura Cornelsen & Rosemary Green & Rachel Turner & Alan D. Dangour & Bhavani Shankar & Mario Mazzocchi & Richard D. Smith, 2015. "What Happens to Patterns of Food Consumption when Food Prices Change? Evidence from A Systematic Review and Meta‐Analysis of Food Price Elasticities Globally," Health Economics, John Wiley & Sons, Ltd., vol. 24(12), pages 1548-1559, December.
    24. Laurent Muller & Anne Lacroix & Jayson L. Lusk & Bernard Ruffieux, 2017. "Distributional Impacts of Fat Taxes and Thin Subsidies," Economic Journal, Royal Economic Society, vol. 127(604), pages 2066-2092, September.
    25. Andreyeva, T. & Long, M.W. & Brownell, K.D., 2010. "The impact of food prices on consumption: A systematic review of research on the price elasticity of demand for food," American Journal of Public Health, American Public Health Association, vol. 100(2), pages 216-222.
    26. Nicole Darmon & Anne Lacroix & Laurent Muller & Bernard Ruffieux, 2014. "Food price policies improve diet quality while increasing socioeconomic inequalities in nutrition," Post-Print hal-01845621, HAL.
    27. John Cawley & David E. Frisvold, 2017. "The Pass‐Through of Taxes on Sugar‐Sweetened Beverages to Retail Prices: The Case of Berkeley, California," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 36(2), pages 303-326, March.
    28. Gareth J. Hollands & Giacomo Bignardi & Marie Johnston & Michael P. Kelly & David Ogilvie & Mark Petticrew & Andrew Prestwich & Ian Shemilt & Stephen Sutton & Theresa M. Marteau, 2017. "The TIPPME intervention typology for changing environments to change behaviour," Nature Human Behaviour, Nature, vol. 1(8), pages 1-9, August.
    29. Naomi E. Feldman & Bradley J. Ruffle, 2015. "The Impact of Including, Adding, and Subtracting a Tax on Demand," American Economic Journal: Economic Policy, American Economic Association, vol. 7(1), pages 95-118, February.
    30. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    31. Just, David R., 2017. "The Behavioral Welfare Paradox: Practical, Ethical and Welfare Implications of Nudging," Agricultural and Resource Economics Review, Cambridge University Press, vol. 46(1), pages 1-20, April.
    32. Smed, Sinne & Jensen, Jorgen D. & Denver, Sigrid, 2007. "Socio-economic characteristics and the effect of taxation as a health policy instrument," Food Policy, Elsevier, vol. 32(5-6), pages 624-639.
    33. Rachel Griffith & Martin O’Connell & Kate Smith, 2018. "Corrective Taxation and Internalities from Food Consumption," CESifo Economic Studies, CESifo Group, vol. 64(1), pages 1-14.
    34. John Cawley & David Frisvold, 2015. "The Incidence of Taxes on Sugar-Sweetened Beverages: The Case of Berkeley, California," NBER Working Papers 21465, National Bureau of Economic Research, Inc.
    35. Jessica Wisdom & Julie S. Downs & George Loewenstein, 2010. "Promoting Healthy Choices: Information versus Convenience," American Economic Journal: Applied Economics, American Economic Association, vol. 2(2), pages 164-178, April.
    36. Laurent Muller & Anne Lacroix & Jayson L. Lusk & Bernard Ruffieux, 2017. "Distributional Impacts of Fat Taxes and Thin Subsidies," Economic Journal, Royal Economic Society, vol. 127(604), pages 2066-2092, September.
    37. Jeffrey Grogger, 2017. "Soda Taxes And The Prices of Sodas And Other Drinks: Evidence From Mexico," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(2), pages 481-498.
    38. Fafchamps, Marcel & Kebede, Bereket & Zizzo, Daniel John, 2015. "Keep up with the winners: Experimental evidence on risk taking, asset integration, and peer effects," European Economic Review, Elsevier, vol. 79(C), pages 59-79.
    39. Stefania Sitzia & Jiwei Zheng & Daniel Zizzo, 2015. "Inattentive consumers in markets for services," Theory and Decision, Springer, vol. 79(2), pages 307-332, September.
    40. Anurag Sharma & Katharina Hauck & Bruce Hollingsworth & Luigi Siciliani, 2014. "The Effects Of Taxing Sugar‐Sweetened Beverages Across Different Income Groups," Health Economics, John Wiley & Sons, Ltd., vol. 23(9), pages 1159-1184, September.
    41. Daniel Zizzo, 2010. "Experimenter demand effects in economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 13(1), pages 75-98, March.
    42. Yuqing Zheng & Edward W. McLaughlin & Harry M. Kaiser, 2013. "Taxing Food and Beverages: Theory, Evidence, and Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(3), pages 705-723.
    43. Ryota Nakamura & Andrew J Mirelman & Cristóbal Cuadrado & Nicolas Silva-Illanes & Jocelyn Dunstan & Marc Suhrcke, 2018. "Evaluating the 2014 sugar-sweetened beverage tax in Chile: An observational study in urban areas," PLOS Medicine, Public Library of Science, vol. 15(7), pages 1-22, July.
    44. Falbe, J. & Thompson, H.R. & Becker, C.M. & Rojas, N. & McCulloch, C.E. & Madsen, K.A., 2016. "Impact of the Berkeley excise tax on sugar-sweetened beverage consumption," American Journal of Public Health, American Public Health Association, vol. 106(10), pages 1865-1871.
    45. Bonnet, Céline & Réquillart, Vincent, 2013. "Tax incidence with strategic firms in the soft drink market," Journal of Public Economics, Elsevier, vol. 106(C), pages 77-88.
    46. Helen Eyles & Cliona Ni Mhurchu & Nhung Nghiem & Tony Blakely, 2012. "Food Pricing Strategies, Population Diets, and Non-Communicable Disease: A Systematic Review of Simulation Studies," PLOS Medicine, Public Library of Science, vol. 9(12), pages 1-22, December.
    47. Ian Shemilt & Gareth J Hollands & Theresa M Marteau & Ryota Nakamura & Susan A Jebb & Michael P Kelly & Marc Suhrcke & David Ogilvie, 2013. "Economic Instruments for Population Diet and Physical Activity Behaviour Change: A Systematic Scoping Review," PLOS ONE, Public Library of Science, vol. 8(9), pages 1-1, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Luca A. Panzone & Natasha Auch & Daniel John Zizzo, 2024. "Nudging the Food Basket Green: The Effects of Commitment and Badges on the Carbon Footprint of Food Shopping," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(1), pages 89-133, January.
    2. Panzone, Luca A. & Ulph, Alistair & Zizzo, Daniel John & Hilton, Denis & Clear, Adrian, 2021. "The impact of environmental recall and carbon taxation on the carbon footprint of supermarket shopping," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    3. Schruff-Lim, Eva-Maria & Van Loo, Ellen J. & van Kleef, Ellen & van Trijp, Hans C.M., 2023. "Turning FOP nutrition labels into action: A systematic review of label+ interventions," Food Policy, Elsevier, vol. 120(C).
    4. Ulph, Alistair & Panzone, Luca & Hilton, Denis, 2023. "Do rational people sometimes act irrationally? A dynamic self-regulation model of sustainable consumer behavior," Economic Modelling, Elsevier, vol. 126(C).
    5. Blake, Miranda R. & Lancsar, Emily & Peeters, Anna & Backholer, Kathryn, 2019. "Sugar-sweetened beverage price elasticities in a hypothetical convenience store," Social Science & Medicine, Elsevier, vol. 225(C), pages 98-107.
    6. Yu SHEN & Wenkai SUN, 2023. "Information and avoidance behaviour: The effect of air pollution disclosure on labour supply in China," International Labour Review, International Labour Organization, vol. 162(4), pages 665-686, December.
    7. Vitt, Nicolai & James, Jonathan & Belot, Michèle & Vecchi, Martina, 2021. "Daily stressors and food choices: A lab experiment with low-SES mothers," European Economic Review, Elsevier, vol. 136(C).
    8. Shi, Xinjie & Shen, Yu & Song, Ran, 2023. "Living with particles: Disclosure of pollution information, individual responses, and health consequences," Journal of Health Economics, Elsevier, vol. 92(C).
    9. Belot, Michèle & James, Jonathan & Vecchi, Martina & Vitt, Nicolai, 2019. "Stress and Food Preferences: A Lab Experiment with Low-SES Mothers," IZA Discussion Papers 12674, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John Cawley & David Frisvold & David Jones & Chelsea Lensing, 2021. "The Pass‐Through of a Tax on Sugar‐Sweetened Beverages in Boulder, Colorado," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 987-1005, May.
    2. Fabrice Etilé & Sébastien Lecocq & Christine Boizot-Szantai, 2021. "Market heterogeneity and the distributional incidence of soft-drink taxes: evidence from France [Regressive sin taxes, with an application to the optimal soda tax]," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 48(4), pages 915-939.
    3. Cornelsen, Laura & Smith, Richard D., 2018. "Viewpoint: Soda taxes – Four questions economists need to address," Food Policy, Elsevier, vol. 74(C), pages 138-142.
    4. John Cawley & Chelsea Crain & David Frisvold & David Jones, 2018. "The Pass-Through of the Largest Tax on Sugar-Sweetened Beverages: The Case of Boulder, Colorado," NBER Working Papers 25050, National Bureau of Economic Research, Inc.
    5. Le Bodo, Yann & Etilé, Fabrice & Julia, Chantal & Friant-Perrot, Marine & Breton, Eric & Lecocq, Sébastien & Boizot-Szantai, Christine & Bergeran, Céline & Jabot, Françoise, 2022. "Public health lessons from the French 2012 soda tax and insights on the modifications enacted in 2018," Health Policy, Elsevier, vol. 126(7), pages 585-591.
    6. J. M. Bauer & L. A. Reisch, 2019. "Behavioural Insights and (Un)healthy Dietary Choices: a Review of Current Evidence," Journal of Consumer Policy, Springer, vol. 42(1), pages 3-45, March.
    7. Haeck, Catherine & Lawson, Nicholas & Poirier, Krystel, 2022. "Estimating consumer preferences for different beverages using the BLP approach," Economics & Human Biology, Elsevier, vol. 46(C).
    8. Caro, Juan Carlos & Ng, Shu Wen & Taillie, Lindsey Smith & Popkin, Barry M., 2017. "Designing a tax to discourage unhealthy food and beverage purchases: The case of Chile," Food Policy, Elsevier, vol. 71(C), pages 86-100.
    9. Fabrice Etilé, 2019. "The Economics of Diet and Obesity: Public Policy," PSE-Ecole d'économie de Paris (Postprint) hal-02154445, HAL.
    10. Pourya Valizadeh & Shu Wen Ng, 2021. "Would A National Sugar‐Sweetened Beverage Tax in the United States Be Well Targeted?," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 961-986, May.
    11. Pierre Dubois & Rachel Griffith & Martin O'Connell, 2020. "How Well Targeted Are Soda Taxes?," American Economic Review, American Economic Association, vol. 110(11), pages 3661-3704, November.
    12. Gonçalves, Judite & Pereira dos Santos, João, 2020. "Brown sugar, how come you taste so good? The impact of a soda tax on prices and consumption," Social Science & Medicine, Elsevier, vol. 264(C).
    13. 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).
    14. Dickson, Alex & Gehrsitz, Markus & Kemp, Jonathan, 2021. "Does a Spoonful of Sugar Levy Help the Calories Go Down? An Analysis of the UK Soft Drinks Industry Levy," IZA Discussion Papers 14528, Institute of Labor Economics (IZA).
    15. Goncalves, Judite & Merenda, Roxanne & dos Santos, João Pereira, 2022. "Not so sweet: The impact of the Portuguese soda tax on producers," Ruhr Economic Papers 938, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    16. Laura Cornelsen & Matthew Quaife & Mylene Lagarde & Richard D. Smith, 2020. "Framing and signalling effects of taxes on sugary drinks: A discrete choice experiment among households in Great Britain," Health Economics, John Wiley & Sons, Ltd., vol. 29(10), pages 1132-1147, October.
    17. Cuadrado, Cristóbal & Dunstan, Jocelyn & Silva-Illanes, Nicolas & Mirelman, Andrew J. & Nakamura, Ryota & Suhrcke, Marc, 2020. "Effects of a sugar-sweetened beverage tax on prices and affordability of soft drinks in Chile: A time series analysis," Social Science & Medicine, Elsevier, vol. 245(C).
    18. Bonnet, Céline & Réquillart, Vincent, 2023. "The effects of taxation on the individual consumption of sugar-sweetened beverages," Economics & Human Biology, Elsevier, vol. 51(C).
    19. Zhang, Yinjunjie & Palma, Marco A., 2018. "Revisiting the Effects of Sugar Tax on Demand Elasticities - Evidence from the BLP Demand Model," 2018 Annual Meeting, August 5-7, Washington, D.C. 273978, Agricultural and Applied Economics Association.
    20. O'Connell, Martin & Smith, Kate, 2020. "Corrective Tax Design and Market Power," CEPR Discussion Papers 14582, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    taxes; signposting; healthy diet; nudges; public health;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I1 - Health, Education, and Welfare - - Health

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:chy:respap:131cherp. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gill Forder (email available below). General contact details of provider: https://edirc.repec.org/data/chyoruk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.