An inquiry on the heterogeneous effects of Soda Taxes

Taxes on sugar sweetened beverages (SSB) are proposed with the promise to improve public health outcomes as people curve SSB consumption and thus, sugar intake, with price hikes, but they also come with an embedded equity concern due to their regressive nature. We evaluate the soda tax introduced by Berkeley in 2015 with two questions in mind: What has been the effect of the policy in actual sugar intake, and what are the differences in treatment effects across income groups. This article is the first to get closer to the aim of the policy by looking at actual sugar intake, feeding retailer POS data with the matched Nutrition Fact information on sugar. I find that sugar intake has fallen, but at a lower rate if compared to liquid content changes, an indication that the policy has provided an incentive to buy SSBs with higher sugar concentration. Furthermore, the evaluation is incomplete if equity is not addressed as well, especially when the public health concern affects low-income households disproportionately. By taking advantage of the richness in POS data, I follow baskets representing income groups' SSB consumption. We find that the reduction in sugar and liquid consumption has been fairly homogeneous across the different baskets, with the middle income groups' baskets facing the deepest reduction in consumption of sugar and liquid and the lowest hike in prices.