0
0
A new study from the University of Washington reveals that sweetened beverage taxes have significantly decreased consumption of sugary drinks among lower-income households, cutting purchases by almost 50%. Conducted across four U.S. cities—Seattle, San Francisco, Oakland, and Philadelphia—this research provides evidence that these taxes could help reduce health disparities by curbing consumption of beverages linked to obesity and Type 2 diabetes.
Published in Health Economics, the study analyzed the purchasing behavior of approximately 400 households before and after the introduction of sweetened beverage taxes. Researchers used data from the Nielsen Consumer Panel, equipping participants with handheld scanners to track purchases in real-time. The study’s findings are notable: while higher-income households reduced their sweetened beverage consumption by 18%, lower-income households cut theirs by 47% after the tax was implemented.
“Sweetened beverages are one of the largest sources of sugar in the American diet, contributing to health issues like obesity and diabetes,” said Melissa Knox, co-author and associate teaching professor of economics at UW. “Lower-income households, who consume more of these drinks on average, stand to gain the most health benefits by reducing their intake.”
The taxes also resulted in significant price increases for sweetened beverages. Lower-income households experienced a 22% price hike, compared to an 11% increase for higher-income households. The research showed no increase in cross-border shopping—where consumers might travel to neighboring cities without the tax to purchase untaxed beverages—but lower-income households did switch to buying untaxed drinks instead of sugary ones.
The study’s results are particularly relevant to policymakers, who have long been concerned about the regressive nature of such taxes. While lower-income families spend a higher proportion of their income on sweetened beverage taxes, the findings suggest that the long-term health benefits outweigh the financial burden.
This study builds on previous research from UW, which demonstrated that sweetened beverage taxes are not only economically beneficial for low-income communities, but also contribute to positive health outcomes. In Seattle, for example, earlier research found that the tax was associated with declines in childhood body mass index (BMI) compared to children in cities without the tax.
“Together, this body of work shows that sweetened beverage taxes are achieving their intended health outcomes, particularly for lower-income households,” said Jessica Jones-Smith, co-author and professor of health systems and population health at UW. “The evidence suggests that the health benefits could be even larger for those with lower incomes.”
As more cities across the U.S. explore the implementation of sweetened beverage taxes, this study provides compelling evidence that such policies can lead to healthier communities while addressing health disparities. With these taxes funneling more dollars toward programs benefiting lower-income households, the overall impact may be a significant improvement in public health.
Reference: Melissa A. Knox et al., “Consumption responses to sweetened beverage taxes by household income in four U.S. cities,” Health Economics (2024). DOI: 10.1002/hec.4905.
