Working Paper: NBER ID: w25052
Authors: John Cawley; David Frisvold; Anna Hill; David Jones
Abstract: In recent years, numerous U.S. cities have enacted taxes on sweetened beverages, but there is relatively little evidence about the effects of these taxes on purchases and consumption. In this paper, we examine the effects of the beverage tax of 1.5 cents per ounce that was implemented in Philadelphia starting January 1, 2017. We surveyed individuals in Philadelphia and nearby comparison communities before the tax and nearly one year after implementation of the tax about their purchases and consumption of beverages. We find that purchases of taxed beverages fell by 8.9 ounces per shopping trip in Philadelphia stores relative to comparison stores outside of the city and that Philadelphia residents increased purchases of taxed beverages outside of the city. The tax reduced adults’ frequency of regular soda consumption by 10.4 times per month, and there is some evidence of a slight reduction in adults’ overall sugar consumption from sweetened beverages, with larger reductions for African-American adults. The tax did not have a substantial effect on the frequency of adults’ consumption of other beverages. We generally do not find detectable effects of the tax on children’s consumption of beverages, although we find a substantial reduction in consumption of added sugars from sweetened beverages among children who had high pre-tax consumption levels.
Keywords: Beverage Tax; Consumption; Public Health; Sugar-Sweetened Beverages
JEL Codes: H2; H71; H75; I12; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Philadelphia beverage tax (H29) | beverage purchases (L66) |
| Philadelphia beverage tax (H29) | frequency of regular soda consumption among adults (L66) |
| Philadelphia beverage tax (H29) | probability of daily soda consumption among adults (D12) |
| Philadelphia beverage tax (H29) | added sugar intake among children with high pre-tax consumption (H29) |
| Philadelphia beverage tax (H29) | overall sugar consumption from sweetened beverages among adults (L66) |