The Impact of the Philadelphia Beverage Tax on Purchases and Consumption By Adults and Children

Wednesday, June 26, 2019: 10:30 AM
Taft - Mezzanine Level (Marriott Wardman Park Hotel)

Presenter: Anna Hill

Co-Authors: John Cawley; David Frisvold; David Jones;

Discussant: Nathan Tefft

In recent years, numerous cities in the U.S. have enacted taxes on sweetened beverages in order to promote health and raise revenue. These taxes are hotly debated and politically controversial, and it remains unclear how they affect important outcomes such as prices, purchases, and consumption of caloric beverages.

To examine the effects of the beverage tax of 1.5 cents per ounce in Philadelphia, we surveyed adults and children in Philadelphia and nearby communities both before the tax and nearly one year after implementation, collecting information about their purchases and consumption of sweetened beverages as well as the consumption of their children. We estimate a difference-in-difference model of the impact of the tax on the purchases of and consumption of taxed beverages. The tax reduced purchases in Philadelphia stores and Philadelphia residents increased purchases of taxed beverages outside of the city. The tax reduced the frequency of adults’ soda consumption by 31 percent, but had no detectable impacts on adults’ consumption of other beverages and limited impacts on children’s consumption of soda or all taxed beverages.

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