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USDA says soda tax would reduce obesity

By Caroline Scott-Thomas , 06-Jul-2010

The US Department of Agriculture (USDA) has added its voice to the debate on soda tax and the prevalence of overweight and obesity, saying that a 20 percent price increase would make a significant difference.

The USDA’s Economic Research Service (ERS) said it was prompted to examine the health effects of taxing calorically sweetened beverages after the Institute of Medicine and the National Academies of Sciences among others suggested that such a tax could help combat soaring obesity rates in the United States. The USDA said that 66.9 percent of US adults are overweight, and 33.4 percent are obese – but found that a 20 percent soda tax could reduce overweight prevalence to 62.4 percent and prevalence of obesity to 30.4 percent over a year.

Its study, drawing on National Health and Nutrition Examination Survey (NHANES) data, found that increasing the price of sugary sodas by 20 percent could cause an average reduction of 37 calories per day, equivalent to 3.8 pounds of body weight over a year for adults, and an average of 43 calories per day, or 4.5 pounds over a year, for children.

The ERS report said that the potential reduction in the number of overweight or obese individuals is due to a large number of adults being overweight or obese by only a few pounds, meaning that even a small weight loss would shift them to a different category; and also because caloric sweetened beverages are disproportionately consumed by overweight people. The report noted that 10.6 percent of overweight adults consume more than 450 calories a day from caloric sweetened beverages – nearly three times the average of 152 calories.

The report used NHANES data on beverage consumption and body mass index (BMI), and then used price elasticity approximates to estimate changes in caloric intake for each beverage category in response to a tax-induced 20-percent increase in the price of caloric sweetened beverages. The researchers assumed that one pound of body fat is equivalent to 3,500 calories.

In addition to the potential effects for adults, the USDA said a beverage tax could have a major effect on children’s weight.

“For children, the at-risk-for-overweight prevalence could decline from 32.3 to 27.0 percent, and the prevalence of overweight children could decline from 16.6 to 13.7 percent,” the researchers wrote.

However, they cautioned that the effectiveness of a soda tax would depend on how much of the expense is passed on to the consumer.

“Responsiveness at the individual or household level could vary across other elements, such as personal preference and income level. The ultimate outcome would depend on many factors, including the size of the tax, the type of tax, and the competitive strategies of beverage manufacturers and food retailers,” the report concluded.

The American Beverage Association has vociferously opposed soda taxes, calling them ‘simplistic and ineffective’ for dealing with public health challenges.

The full USDA report is available online here .

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