Abstract
In 2014 an excise tax to non-alcoholic sweetened beverages (SSB) was implemented in Mexico. The objective of this paper is to study whether and to what degree these taxes passed-through onto SSB prices in urban areas overall and by region, type of beverage and package size. Prices were obtained from the National Institute of Statistics and Geography from 2011 to 2014. We applied a pre-post quasi-experimental approach using fixed effects models. In sensitivity analysis we applied other model specifications to test the robustness of the findings and we also present weighted estimations based on household purchases. The dependent variables are real prices of a specific beverage category; the main independent variables are dummies for each month of 2014, and the models adjust for time trends and seasonality. Results suggest that the SSB tax passed along to consumers for all SSBs and we found overshifting for the carbonated SSBs. A greater effect is seen among the small package sizes, and we see heterogeneous effects by region. Estimating the effect of the tax on prices is important to understand the potential effect on consumption.
Highlights
The prevalence of overweight and obesity in Mexico has reached 73% of the adult women population, 69% of men and more than 30% of children and adolescents [1,2]
Obesity and chronic diseases are caused by multiple factors, evidence shows that consumption of sweetened sugar beverages (SSB) is a risk factor for obesity, type two diabetes and heart disease [5,6,7,8,9]
The objective of this paper is to present the analysis of the effect of the Mexican SSB tax on prices in urban areas using price data from 46 urban areas from 2011 to 2014 and to see if there is heterogeneity by region, type of beverage and package size
Summary
The prevalence of overweight and obesity in Mexico has reached 73% of the adult women population, 69% of men and more than 30% of children and adolescents [1,2]. Mexico ranks second on obesity and first on diabetes prevalence of all countries members of the Organization for Economic Cooperation and Development [3,4]. Obesity and chronic diseases are caused by multiple factors, evidence shows that consumption of sweetened sugar beverages (SSB) is a risk factor for obesity, type two diabetes and heart disease [5,6,7,8,9]. Recent evidence shows that 71% of the consumption of added sugar in Mexico.
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