Adherence
Implementing a beverage excise tax on sugar-sweetened and artificially sweetened beverages significantly increases their retail price and substantially reduces their volume sales, although cross-border shopping partially offsets the reduction in the taxed jurisdiction.
If you are a policy maker, a beverage tax is an effective tool to reduce sugary drink consumption. Expect prices to rise, which drives the reduction in sales. Be aware that some consumers will shop across borders, so design the tax to minimize this leakage (e.g., regional coordination) or accept that a portion of the sales reduction will be offset by out-of-city purchases.
In Philadelphia in 2017, the implementation of a beverage excise tax on sugar-sweetened and artificially sweetened beverages was associated with significantly higher beverage prices and a significant and substantial decline in volume of taxed beverages sold. This decrease in taxed beverage sales volume was partially offset by increases in volume of sales in bordering areas.
Why this rating
Difference-in-differences design with a control city (Baltimore) and large retailer sales data, though observational.
Source
Association of a Beverage Tax on Sugar-Sweetened and Artificially Sweetened Beverages With Changes in Beverage Prices and Sales at Chain Retailers in a Large Urban Setting
Christina A. Roberto et al. · JAMA · 2019
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