Led by David Frisvold from the Department of Economics at Emory University, researchers report that, while a soda tax would lead to a “moderate reduction in soft drink consumption by children and adolescents”, such a reduction would be off-set by “increases in consumption of other high calorie drinks”.
Dr Frisvold and his co-workers base their conclusions on state soft drink sales and excise tax information between 1989 and 2006 correlated with data from the National Health and Nutrition Examination Survey (NHANES). They publish their findings in the Journal of Public Economics.
The study adds to the ongoing debate about the merits of imposing higher taxes on soft drinks. Advocates point to the potential to reduce calorie intakes and therefore help reduce exploding obesity rates. On the other hand, critics such as the American Beverage Association has vociferously opposed soda taxes, calling them ‘simplistic and ineffective’ for dealing with public health challenges.
Same data, different conclusions
The new study appears at odds with a recent study by the USDA’s Economic Research Service (ERS), which also used NHANES data. The USDA study, available here, found that a 20 percent soda tax could reduce overweight prevalence to 62.4 percent (from 66.9 percent currently) and prevalence of obesity to 30.4 percent over a year (from 33.4 percent).
The USDA study 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.
Dr Frisvold and his co-workers came to a different conclusion, however, noting that “the evidence to date is that soft drink taxes are ineffective as an ‘obesity tax’”.
By merging data from NHANES with information on state soft drink sales and excise tax they calculated that “soft drink taxation, as currently practiced in the United States, leads to a moderate reduction in soft drink consumption by children and adolescents. However, we show that this reduction in soda consumption is completely offset by increases in consumption of other high calorie drinks.”
Door still wide open
The researchers said that, while there is evidence against the effectiveness of soda taxes, their findings suggest at least two avenues of further inquiry.
“First, although there is no evidence that soft drink taxes improve weight outcomes in children and adolescents, the fact that children and adolescents substitute more nutritious whole milk for soft drinks when taxed suggests that there may be broader health benefits that are not yet understood.
“Second, most historical tax rates are considerably lower than those that have been recently proposed, so that extrapolating our results to much larger increases in tax rates may not be appropriate. It is possible that there is a tax rate threshold at which consumers’ reactions are greatly magnified, so it is unclear whether consumer substitution patterns would be sufficiently different with large tax changes to reduce total caloric intake.
“Findings from these areas of inquiry could suggest that there are pathways by which it is possible that soft drink taxes could indirectly improve child and adolescent health,” they added.
Dr Frisvold collaborated with Jason Fletcher from the School of Public Health at Yale University, and Nathan Tefft from the Department of Economics, Bates College.
Source: Journal of Public Economics
Published online ahead of print, doi: 10.1016/j.jpubeco.2010.09.005
“The effects of soft drink taxes on child and adolescent consumption and weight outcomes”
Authors: Jason M. Fletcher, David E. Frisvold, Nathan Tefft