Abstract
South Africa faces a severe and growing obesity epidemic. Obesity and its co-morbidities raise public and private expenditures on healthcare. Sugary beverages are heavily consumed in South Africa and are linked to the onset of overweight and obesity. Excise taxation of sugary beverages has been proposed and adopted in other settings as a means to reduce harms from their consumption. A tax on the sugar content of non-alcoholic beverages has been proposed for implementation in South Africa, however, the public health effects and revenue raising potential of this measure hinges on estimates of the targeted beverages own- and cross-price elasticities. This study applies demand system methods by combining expenditure survey data and sub-national price data to provide the first estimates of price and expenditure elasticities for categories of soft drinks that would be subject to South Africa's proposed sugary beverage tax. The results suggest that demand for these products is sufficiently price-elastic such that a significant reduction in consumption may result from a tax.
Highlights
And in South Africa, public health advocates have called for policies to reduce sugar-sweetened beverage consumption in efforts to reduce the burden of obesity and non-communicable diseases
We combine detailed household-level expenditure data drawn from Statistics South Africa's Income and Expenditure Survey (IES) 2010/ 2011, and regionally disaggregated average product price data collected by Statistics South Africa's Consumer Price Index (CPI) unit, to estimate a system of regressions of products' expenditure share on all included products' prices, controlling for household characteristics
Of the beverages that would potentially be subject to a tax under consideration in this study, mean expenditure is greatest on carbonated soft drinks (CSDs)
Summary
And in South Africa, public health advocates have called for policies to reduce sugar-sweetened beverage consumption in efforts to reduce the burden of obesity and non-communicable diseases. Between 2003 and 2012, the prevalence of obesity among women grew from 27.4% to 39.2%, and from 7.5% to 10.6% among men (Shisana et al, 2013). Contemporaneous to this rise in obesity, South Africa has seen a significant rise in the consumption of processed and ultra-processed foods, including sugary beverages (Igumbor et al, 2012). Sugary beverages (SBs) are non-alcoholic beverages containing added or free sugars that the nutrition epidemiology literature links to a number of adverse health conditions (Hu, 2013). The chronic nature of the diseases associated with SB consumption places a significant strain on the already resource-constrained HIV/AIDS-laden healthcare system in South Africa
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