Are Sugar-Sweetened Beverage Taxes a Cost-Effective Means of Reducing Weight?

Abstract

1499-2671/$ e see front matter 2014 Canadian Dia http://dx.doi.org/10.1016/j.jcjd.2013.08.259 Buhler et al (1) are to be applauded for attempting to reach a consensus on the desirability of new sugar-sweetened beverage (SSB) taxes aimed at fighting obesity. Nevertheless, a group’s consensus is only as meritorious as the diversity of ideas and knowledge represented in the group. There are a number of other perspectives that should be considered before lawmakers seriously consider SSB taxes. The first set of concerns relates to the efficacy of an SSB tax in attaining its ultimate goal: reducing obesity. Buhler et al (1) are correct that an increase in the price of SSBs will probably lower consumption, but the key question is: by how much? It is inappropriate to focus only on the own-price elasticity of demand for SSBs. One reason is that there are substitutes for taxed goods, such as milk, juice and beer. The availability of caloric substitutes will lower the weight impacts of a tax beyond that implied by the ownprice elasticity (2). That is one reasonwhy some analyses show that only across-the-board food taxes will significantly affect weight (3). The problem with across-the-board food taxes is that they are, as Buhler et al (1) recognize, regressive. However, the key issue of regressiveness is not, as they suggest, whether the rich and the poor pay the same amount for the taxed goods but rather, the percent of income spent on the goods. Economically, a tax will be effective only to the extent consumers see it reflected in the retail price. In the United States, where taxes are added at the cash register and are not posted on the shelf, the “effective” own-price elasticity is something much smaller (and thus the anticipated weight impacts of a SSB tax are much smaller) than is suggested by an analysis of the conventional own-price elasticity (4). Even if the posted retail price reflects the tax impact, the tax effects will be partially mitigated and