Abstract Taxes on sugar-sweetened beverages and other types of “sin taxes” are usually introduced at the local level and on the supply side; the efficacy of such taxes is challenged… Click to show full abstract
Abstract Taxes on sugar-sweetened beverages and other types of “sin taxes” are usually introduced at the local level and on the supply side; the efficacy of such taxes is challenged by tax avoidance behavior. In this study, we evaluate the impact of sugar-sweetened beverage taxes in Seattle, WA; Boulder, CO; Cook County, IL (Chicago); Philadelphia, PA, and two cities in the San Francisco Bay Area in California (Berkeley and Oakland). We use grocery scanner data relying on a series of difference-in-difference designs. Results show that each cent per ounce of taxes causes the price of the taxed beverages to increase in a range from 0.47 to 0.98 cents/ounce, and the sales quantity of taxed beverages to decrease in a range of 5.1–14.4%. But the efficacy of the sugar-sweetened beverage tax is undermined by two avoidance behaviors: (1) cross-border shopping avoidance, where people shop outside of the taxed area; (2) substitution avoidance, in which people switch from taxed to tax-exempt beverages that are just as high in sugar. The results from this study provide evidence that sugar-sweetened beverage taxes can be effective. However, to enhance the effectiveness of the taxes, policy makers should consider tax avoidance when developing future similar policies.
               
Click one of the above tabs to view related content.