Working Paper: NBER ID: w26393
Authors: John Cawley; David Frisvold; David Jones
Abstract: Since 2017, many U.S. cities have implemented taxes on sugar-sweetened beverages (SSBs) to decrease consumption of sugary beverages and raise revenue. In this paper, we analyze household receipt data to examine the impact of SSB taxes on households’ purchases of taxed and untaxed beverages in the four largest U.S. cities with such taxes: Philadelphia, Pennsylvania; San Francisco, California; Seattle, Washington; and Oakland, California. We estimate the impact of these taxes by comparing changes in monthly household purchases in the treatment cities to changes in one of two comparison groups: 1) areas adjacent to the treatment cities; or 2) a matched set of households nationally. We find that an increase in the beverage tax rate of 1 cent per ounce decreases household purchases of taxed beverages by 53.0 ounces per month or 12.2 percent. This impact is small in magnitude and consistent with a reduction in individual consumption of 5 calories per day per household member and eventual reduction in weight of 0.5 pounds. When we examine results separately by city, we find that the decline was concentrated in Philadelphia, where the tax decreased purchases by 27.7 percent. We do not find impacts of the taxes in the other three cities combined.
Keywords: sugar-sweetened beverage taxes; household purchases; public health; difference-in-differences
JEL Codes: H23; H71; I12; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increase in the beverage tax rate of 1 cent per ounce (H29) | decrease in household purchases of taxed beverages (H31) |
| decrease in household purchases of taxed beverages (H31) | decrease of approximately 5 calories per day per household member (D12) |
| decrease of approximately 5 calories per day per household member (D12) | eventual weight loss of 0.5 pounds (D15) |
| increase in the beverage tax rate of 1 cent per ounce (H29) | decrease in purchases of untaxed beverages (H29) |
| SSB taxes (H29) | spillover effects to neighboring areas (R11) |
| decrease in household purchases of taxed beverages in Philadelphia (H31) | decrease in household purchases of taxed beverages in other cities (R22) |