[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/socmed/v238y2019ic9.html
   My bibliography  Save this article

Sugar-based beverage taxes and beverage prices: Evidence from South Africa's Health Promotion Levy

Author

Listed:
  • Stacey, Nicholas
  • Mudara, Caroline
  • Ng, Shu Wen
  • van Walbeek, Corné
  • Hofman, Karen
  • Edoka, Ijeoma
Abstract
A growing number of jurisdictions are introducing taxes on sugar-sweetened beverages (SSBs) in efforts to reduce sugar intake, obesity, and associated metabolic conditions. A key dimension of the impact of such taxes is how they induce changes in the prices of the taxed beverages and their un-taxed substitutes. At present these taxes have typically been based solely on volume. More recently, however, due to the potential to target the source of SSBs' health harms and to incentivize product reformulation, SSB taxes are being levied based on sugar content. In April of 2018 South Africa implemented such a tax, the Health Promotion Levy (HPL), at a rate of 0.021 ZAR (approximately 0.15 US cents) for each gram of sugar over an initial threshold of 4 g/100 ml. Drawing on a dataset of price observations (N = 71, 677) collected in South Africa between January 2013 and March 2019, we study changes in beverage prices following the introduction of the HPL. We find null price increases among un-taxed beverages and find significant price increases for carbonates, the largest taxed product category. However, within carbonates we find similar increases in price for low- and high-sugar brands, despite the underlying difference in tax liability. In addition, while we find evidence of product reformulation, we find significant price increases among the brands that reduced their sugar content. While the findings are broadly consistent with the price changes of volume-based SSB taxes, future considerations of price effects of sugar-based SSB taxes need to account for the opportunity for intra-firm heterogeneity in price response among large multi-product firms.

Suggested Citation

  • Stacey, Nicholas & Mudara, Caroline & Ng, Shu Wen & van Walbeek, Corné & Hofman, Karen & Edoka, Ijeoma, 2019. "Sugar-based beverage taxes and beverage prices: Evidence from South Africa's Health Promotion Levy," Social Science & Medicine, Elsevier, vol. 238(C), pages 1-1.
    • Handle: RePEc:eee:socmed:v:238:y:2019:i:c:9
    DOI: 10.1016/j.socscimed.2019.112465
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0277953619304599
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.socscimed.2019.112465?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. John Cawley & David Frisvold & Anna Hill & David Jones, 2020. "The Impact of the Philadelphia Beverage Tax on Prices and Product Availability," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(3), pages 605-628, June.
    2. John Cawley & David E. Frisvold, 2017. "The Pass‐Through of Taxes on Sugar‐Sweetened Beverages to Retail Prices: The Case of Berkeley, California," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 36(2), pages 303-326, March.
    3. Blecher, Evan, 2015. "Taxes on tobacco, alcohol and sugar sweetened beverages: Linkages and lessons learned," Social Science & Medicine, Elsevier, vol. 136, pages 175-179.
    4. M Arantxa Colchero & Juan Carlos Salgado & Mishel Unar-Munguía & Mariana Molina & Shuwen Ng & Juan Angel Rivera-Dommarco, 2015. "Changes in Prices After an Excise Tax to Sweetened Sugar Beverages Was Implemented in Mexico: Evidence from Urban Areas," PLOS ONE, Public Library of Science, vol. 10(12), pages 1-11, December.
    5. Falbe, J. & Rojas, N. & Grummon, A.H. & Madsen, K.A., 2015. "Higher retail prices of sugar-sweetened beverages 3 months after implementation of an excise tax in Berkeley, California," American Journal of Public Health, American Public Health Association, vol. 105(11), pages 2194-2201.
    6. Caitlan Russell & Corne van Walbeek, 2016. "How does a Change in the Excise Tax on Beer Impact Beer Retail Prices in South Africa?," South African Journal of Economics, Economic Society of South Africa, vol. 84(4), pages 555-573, December.
    7. Cawley, John & Frisvold, David & Hill, Anna & Jones, David, 2019. "The impact of the Philadelphia beverage tax on purchases and consumption by adults and children," Journal of Health Economics, Elsevier, vol. 67(C).
    8. Caitlan Russell & Corne van Walbeek, 2016. "How does a change in the excise tax on beer impact beer retail prices in South Africa?," SALDRU Working Papers 162, Southern Africa Labour and Development Research Unit, University of Cape Town.
    9. Caitlan Russell & Corné van Walbeek, 2016. "How does a change in the excise tax on beer impact beer retail prices in South Africa?," Working Papers 573, Economic Research Southern Africa.
    10. Ryota Nakamura & Andrew J Mirelman & Cristóbal Cuadrado & Nicolas Silva-Illanes & Jocelyn Dunstan & Marc Suhrcke, 2018. "Evaluating the 2014 sugar-sweetened beverage tax in Chile: An observational study in urban areas," PLOS Medicine, Public Library of Science, vol. 15(7), pages 1-22, July.
    11. John Cawley & Chelsea Crain & David Frisvold & David Jones, 2018. "The Pass-Through of the Largest Tax on Sugar-Sweetened Beverages: The Case of Boulder, Colorado," NBER Working Papers 25050, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ifeanyichi, Martilord & Dim, Cyril & Bognini, Maeve & Kebede, Meskerem & Singh, Darshita & Onwujekwe, Obinna & Hargest, Rachel & Friebel, Rocco, 2024. "Can sugar taxes be used for financing surgical systems in Nigeria? A mixed-methods political economy analysis," LSE Research Online Documents on Economics 122863, London School of Economics and Political Science, LSE Library.
    2. Bercholz, Maxime & Ng, Shu Wen & Stacey, Nicholas & Swart, Elizabeth C., 2022. "Decomposing consumer and producer effects on sugar from beverage purchases after a sugar-based tax on beverages in South Africa," Economics & Human Biology, Elsevier, vol. 46(C).
    3. Alsukait, Reem & Wilde, Parke & Bleich, Sara N. & Singh, Gitanjali & Folta, Sara C., 2020. "Evaluating Saudi Arabia’s 50% carbonated drink excise tax: Changes in prices and volume sales," Economics & Human Biology, Elsevier, vol. 38(C).
    4. Goncalves, Judite & Merenda, Roxanne & Pereira dos Santos, João, 2023. "Not So Sweet: Impacts of a Soda Tax on Producers," IZA Discussion Papers 15968, Institute of Labor Economics (IZA).
    5. Libby Hattersley & Alan Fuchs & Alberto Gonima & Lynn Silver & Kate Mandeville, 2020. "Business, Employment, and Productivity Impacts of Sugar-Sweetened Beverages Taxes," World Bank Publications - Reports 34082, The World Bank Group.
    6. Cawley, John & Frisvold, David, 2023. "Review: Taxes on sugar-sweetened beverages: Political economy, and effects on prices, purchases, and consumption," Food Policy, Elsevier, vol. 117(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pierre Dubois & Rachel Griffith & Martin O'Connell, 2020. "How Well Targeted Are Soda Taxes?," American Economic Review, American Economic Association, vol. 110(11), pages 3661-3704, November.
    2. Le Bodo, Yann & Etilé, Fabrice & Julia, Chantal & Friant-Perrot, Marine & Breton, Eric & Lecocq, Sébastien & Boizot-Szantai, Christine & Bergeran, Céline & Jabot, Françoise, 2022. "Public health lessons from the French 2012 soda tax and insights on the modifications enacted in 2018," Health Policy, Elsevier, vol. 126(7), pages 585-591.
    3. Gonçalves, Judite & Pereira dos Santos, João, 2020. "Brown sugar, how come you taste so good? The impact of a soda tax on prices and consumption," Social Science & Medicine, Elsevier, vol. 264(C).
    4. Powell, Lisa M. & Leider, Julien & Léger, Pierre Thomas, 2020. "The impact of the Cook County, IL, Sweetened Beverage Tax on beverage prices," Economics & Human Biology, Elsevier, vol. 37(C).
    5. Jones-Smith, Jessica C. & Pinero Walkinshaw, Lina & Oddo, Vanessa M. & Knox, Melissa & Neuhouser, Marian L. & Hurvitz, Philip M. & Saelens, Brian E. & Chan, Nadine, 2020. "Impact of a sweetened beverage tax on beverage prices in Seattle, WA," Economics & Human Biology, Elsevier, vol. 39(C).
    6. John Cawley & David Frisvold & David Jones & Chelsea Lensing, 2021. "The Pass‐Through of a Tax on Sugar‐Sweetened Beverages in Boulder, Colorado," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 987-1005, May.
    7. Powell, Lisa M. & Leider, Julien, 2020. "The impact of Seattle’s Sweetened Beverage Tax on beverage prices and volume sold," Economics & Human Biology, Elsevier, vol. 37(C).
    8. John Cawley & David Frisvold & David Jones, 2020. "The impact of sugar‐sweetened beverage taxes on purchases: Evidence from four city‐level taxes in the United States," Health Economics, John Wiley & Sons, Ltd., vol. 29(10), pages 1289-1306, October.
    9. Daniel John Zizzo & Melanie Parravano & Ryota Nakamura & Suzanna Forwood & Marc Suhrcke, 2021. "The impact of taxation and signposting on diet: an online field study with breakfast cereals and soft drinks," Experimental Economics, Springer;Economic Science Association, vol. 24(4), pages 1294-1324, December.
    10. Pourya Valizadeh & Shu Wen Ng, 2021. "Would A National Sugar‐Sweetened Beverage Tax in the United States Be Well Targeted?," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 961-986, May.
    11. Schmacker, Renke & Smed, Sinne, 2020. "Do prices and purchases respond similarly to soft drink tax increases and cuts?," Economics & Human Biology, Elsevier, vol. 37(C).
    12. Brandon J. Restrepo & Jonathan H. Cantor, 2020. "The effects of soda taxes on adolescent sugar intake and blood sugar," Health Economics, John Wiley & Sons, Ltd., vol. 29(11), pages 1422-1434, November.
    13. Sara Capacci & Olivier Allais & Celine Bonnet & Mario Mazzocchi, 2019. "The impact of the French soda tax on prices and purchases. An ex post evaluation," PLOS ONE, Public Library of Science, vol. 14(10), pages 1-22, October.
    14. Gračner, Tadeja & Kapinos, Kandice A. & Gertler, Paul J., 2022. "Associations of a national tax on non-essential high calorie foods with changes in consumer prices," Food Policy, Elsevier, vol. 106(C).
    15. Paula Carvalho Pereda & Carolina Policarpo Garcia, 2021. "Price impact of taxes on sugary drinks in Brazil," Working Papers, Department of Economics 2021_06, University of São Paulo (FEA-USP).
    16. Dickson, Alex & Gehrsitz, Markus & Kemp, Jonathan, 2021. "Does a Spoonful of Sugar Levy Help the Calories Go Down? An Analysis of the UK Soft Drinks Industry Levy," IZA Discussion Papers 14528, Institute of Labor Economics (IZA).
    17. Fabrice Etilé & Sébastien Lecocq & Christine Boizot-Szantai, 2021. "Market heterogeneity and the distributional incidence of soft-drink taxes: evidence from France [Regressive sin taxes, with an application to the optimal soda tax]," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 48(4), pages 915-939.
    18. John Cawley & David Frisvold & Anna Hill & David Jones, 2020. "The Impact of the Philadelphia Beverage Tax on Prices and Product Availability," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(3), pages 605-628, June.
    19. Judite Gonçalves & Roxanne Merenda & João Pereira dos Santos, 2024. "Not so sweet: impacts of a soda tax on producers," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(5), pages 1388-1412, October.
    20. Brester, Gary W. & McCullough, Michael & Atwood, Joseph & Austin, Caroline, 2023. "Beer Excise Taxes and the Craft Beverage and Modernization Tax Reform Act," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 48(2), May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:socmed:v:238:y:2019:i:c:9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/315/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.