Abstract
The global shift towards diets high in sugar-sweetened beverages (SSBs) is linked to higher prevalence of obesity, diabetes and most other non-communicable diseases. In Colombia, one out of every two people was overweight or obese by 2010. This study estimates price-elasticities from a Quadratic Almost Ideal Demand System model, using the 2006–2007 Colombian Income and Expenditure survey. The food groups that were jointly considered were: unsweetened unflavored milks; coffee and tea; sugar sweetened beverages (SSBs); sweets and candies (including sugar); dairy products; meats and animal-based products; grains based staples; fruits and vegetables; and condiments and snacks. We take into account the high proportion of households not purchasing specific food and beverage groups (censored data) and endogeneity on both prices (as unit values) and total expenditure. Unhealthy beverages are price-elastic (-1.61 for SSBs) meaning that the change in consumption is proportionally larger with respect to a change in price. Also, there is a high complementarity among SSBs and major food groups (grains, meats and fruits and vegetables). In Colombia, the design of a meaningful tax to influence healthier diets is a next critical step. This study also shows that a tax of 20% on SSBs should prove to be effective, and can yield revenues of about 1% of the Colombian government’s total annual fiscal revenue, which can potentially be directed towards public health promotion and investments.
Highlights
There is a growing concern in developing countries regarding how economic transitions influence the prevalence of obesity and other non-communicable diseases (NCDs) [1,2,3,4,5]
Our results show that there are important differences in magnitude and sign of the estimated elasticities when accounting for censoring, reflecting two effects; first, the parameter estimates change due to the specification of the demand system, as noted above, and the elasticity formula in the censored case explicitly includes the contribution of households with zero purchases
We found own-price elasticities of -1.62 for sugar-sweetened beverages (SSBs), -1.05 for unsweetened unflavored milks, -1.35 for coffee and tea, -0.80 for sweets and candies, -0.94 for dairy based products, -0.85 for grain based staples, -0.84 for animal based products, -0.96 for fruits and vegetables, and -1.01 for condiments and snacks
Summary
There is a growing concern in developing countries regarding how economic transitions influence the prevalence of obesity and other non-communicable diseases (NCDs) [1,2,3,4,5]. The 2010 National Nutritional Status Survey estimated that the prevalence of overweight and obesity is 51.1% among adults and 17.5% among children 5-17y [6,7,8]. It is clear from a large body of epidemiological research that SSBs represent a major cause of the health problems that include obesity, diabetes and dental caries [9,10,11].
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