How do consumers respond to “sin taxes”? New evidence from a tax on sugary drinks.

Eleonora Fichera; Toni Mora; Beatriz Lopez-Valcarcel; David Roche

doi:10.1016/j.socscimed.2021.113799

How do consumers respond to “sin taxes”? New evidence from a tax on sugary drinks.

Eleonora Fichera
, Toni Mora
, Beatriz Lopez-Valcarcel
, David Roche

Universitat Internacional de Catalunya
Universidad de Las Palmas de Gran Canaria

Research output: Contribution to journal › Article › peer-review

29 Citations (SciVal)

Abstract

It is unclear what the effects of taxes on sugar sweetened beverages (SSBs) are on consumer behaviour and which consumers may be affected the most. We evaluate the effect of the SSB tax introduced in Catalonia (but not in the rest of Spain) in May 2017 using loyalty card data of monthly purchases by 900,000 households from May 2016 to April 2018. Using a Difference-in-Differences approach, we study the SSB tax effect on the purchased quantity of beverages and sugar. Our results suggest a reduction in purchases of taxed beverages and a small increase in purchases of untaxed beverages. Households have substituted taxed beverages with their lower sugar (untaxed) counterparts. This has led to a 2.2% overall reduction in sugar purchases from beverages. Our study implies that although sin taxes moderately change consumer behaviour, a combination of different policies would be required to tackle obesity.

Original language	English
Article number	113799
Journal	Social Science & Medicine
Volume	274
Early online date	25 Feb 2021
DOIs	https://doi.org/10.1016/j.socscimed.2021.113799
Publication status	Published - 1 Apr 2021

Funding

We thank participants of the European Society for Population Economics (2019); the International Health Economics Association pre-congress organized session on the Economics of Obesity (2019); the Health Economists' Study Group at the University of York (2018); the American Society of Health Economists conference in Atlanta (2018); seminar participants at the Department of Economics, University of Leicester and University of Bath, Public Health England (London), the Health Economics Group at the University of Newcastle and the Health Economics Research Centre at the University of Oxford. Authors gratefully acknowledge the financial support received from the Chair in Public Finance: Healthcare and Education Policy Assessment (cooperation with EUREST Catalunya). Financial support was also received from the ECO2017-83771-C3-3-R ( MINECO / AEI / FEDER , UE ) and 2017SGR263 and marketing department of the supermarket chain.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 3 Good Health and Well-being
SDG 12 Responsible Consumption and Production

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10.1016/j.socscimed.2021.113799Licence: CC BY-NC-ND

Cite this

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abstract = "It is unclear what the effects of taxes on sugar sweetened beverages (SSBs) are on consumer behaviour and which consumers may be affected the most. We evaluate the effect of the SSB tax introduced in Catalonia (but not in the rest of Spain) in May 2017 using loyalty card data of monthly purchases by 900,000 households from May 2016 to April 2018. Using a Difference-in-Differences approach, we study the SSB tax effect on the purchased quantity of beverages and sugar. Our results suggest a reduction in purchases of taxed beverages and a small increase in purchases of untaxed beverages. Households have substituted taxed beverages with their lower sugar (untaxed) counterparts. This has led to a 2.2\% overall reduction in sugar purchases from beverages. Our study implies that although sin taxes moderately change consumer behaviour, a combination of different policies would be required to tackle obesity.",

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How do consumers respond to “sin taxes”? New evidence from a tax on sugary drinks.

Abstract

Funding

UN SDGs

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