The Most Comprehensive Study of Soda Taxes Says a Lot About Consumption, Prices, and the Future of Nudges
Since 2015, a handful of U.S. cities have begun taxing soda and other sugar-sweetened beverages. With funding from the Robert Wood Johnson Foundation, economists at Mathematica, the University of Iowa, and Cornell University set out to conduct the most comprehensive study to date on the effects of those taxes in the U.S. They examined effects on purchases, consumption, prices, and product availability roughly one year after implementation in Philadelphia and Oakland; they also examined changes in household purchases across four U.S. cities (Philadelphia, Oakland, Seattle, and San Francisco). The study produced the first findings on impacts in Oakland and impacts on children’s consumption in any U.S. city.
For this episode of On the Evidence, we spoke with the principal investigators for the project: Dave Jones, an associate director in the Health Unit at Mathematica, and Dave Frisvold, an associate professor in the Department of Economics at the University of Iowa. Click here to listen to the full interview with Jones and Frisvold.
Find specific topics covered in the conversation at the following links:
- What Jones and Frisvold say when people ask, “Do soda taxes work?”
- Who experienced a decline in consumption, despite a lack of evidence of overall consumption declining, on average, among residents in Philadelphia and Oakland
- How they gathered data on beverage purchases and consumption in Philadelphia and Oakland
- Why they collected evidence from a wide range of store types, from small corner stores and convenience stores to large warehouse stores
- The difference between purchases and consumption, why the beverage taxes appear to be affecting purchases more than consumption, and why it matters that they found evidence of cross-border shopping in Philadelphia and Oakland
- What a tax pass-through means and how it might be affecting the efficacy of the beverage taxes
- What questions about sweetened-beverage taxes they were unable to answer that they would like to see future studies explore
- How the impacts on household purchases in Philadelphia compare with impacts in Oakland, Seattle, and San Francisco, the three other U.S. cities they studied
The findings discussed on this podcast also appear in the following working papers, issue briefs, and journal articles.
Jones, David, David Frisvold, and John Cawley. “Multi-City Study Shows Beverage Taxes Raise Prices, Reduce and Shift Purchases.” Cambridge, MA: Mathematica, October 2019.
Cawley, John, David E. Frisvold, and David Jones. “The Impact of Sugar-Sweetened Beverage Taxes on Purchases: Evidence from Four City-Level Taxes in the U.S.” National Bureau of Economic Research Working Paper #26393. Cambridge, MA: National Bureau of Economic Research, October 2019.
Holdbrook, Jeanette, Dana Petersen, David Jones, and David Frisvold. “How Retailers Responded to Taxes on Sweetened Beverages: A Tale of Two Cities.” Cambridge, MA: Mathematica, September 2019.
Cawley, John, David E. Frisvold, Anna Hill, and David Jones. “Oakland’s Sugar-Sweetened Beverage Tax: Impacts on Prices, Purchases and Consumption by Adults and Children.” National Bureau of Economic Research Working Paper #26233. Cambridge, MA: National Bureau of Economic Research, September 2019.
Cawley, J., D. Frisvold, A. Hill, and D. Jones. “The Impact of the Philadelphia Beverage Tax on Purchases and Consumption by Adults and Children.” Journal of Health Economics, vol. 67, September 2019.
Cawley, John, David E. Frisvold, Anna Hill, and David Jones. “The Impact of the Philadelphia Beverage Tax on Prices and Product Availability.” National Bureau of Economic Research Working Paper #24990. Cambridge, MA: National Bureau of Economic Research, September 2018.