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Do Soda Taxes Work? It’s Complicated.

July 2, 2019

Kellogg Insight,

Stephan Seiler & Anna Tuchman,

July 1, 2019-

Several cities have started taxing sodas and other sweetened drinks in the past five years. The goal is to bring in revenue, improve public health, or both. But it’s unclear whether these “soda taxes” are achieving their goals. So Anna Tuchman, an assistant professor of marketing at Kellogg, and colleagues analyzed the soda tax in Philadelphia. Philly is an ideal setting for such research, they say, because the city has roughly the same rate of overweight and obese residents as the national average. Other cities that have adopted soda taxes, such as Berkeley and Boulder, have a much lower percentage of overweight and obese residents, making results harder to generalize to other parts of the country.

The researchers found that Philadelphia’s tax did reduce sales of sweetened drinks in the city. But purchases increased outside city limits, suggesting that many people were simply driving a few miles to buy their high-calorie drinks at lower prices. And consumers actually continued buying soda at roughly the same rate. What they tended to cut down on were taxed drinks at the lower end of the calorie spectrum, such as sports drinks.

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