Sweetened beverage taxes nearly halves consumption among low-income families

Seattle, San Francisco, Oakland and Philadelphia are among the eight US cities to implement taxes on sugar-sweetened beverages. A new study looking at “approximately” 400 households in those cities found that participants with lower-incomes decreased their consumption of sugary beverages by 47% as a result of the policy.

The same was, to a lesser extent, true for higher-income households, which lowered consumption by 18%

“If households reduce their sugar intake, they will experience health benefits,” says Melissa Knox, co-author and associate teaching professor of economics at the University of Washington, US.

“Sweetened beverages are one of the largest sources of sugar in the American diet. They have all kinds of health consequences and don’t really provide any nutrition. The idea with the tax is that lower-income people because they reduce their intake more, receive greater health benefits than the higher-income households.”

As part of this study published in Health Economics, researchers followed the households for a year before and after the introduction of taxation on sugary beverages. The participants were given handheld scanners to monitor their purchases.

Persistent change

The study found that established differences in post-tax consumption persisted a year after the tax was introduced.

“We also looked at untaxed beverages and found that lower-income households are substituting with untaxed beverages,” Knox adds. “They’re using some of their money to go buy a different beverage, rather than buying a candy bar instead of buying a Coke.”

Jessica Jones-Smith, co-author and professor of health systems and population health at the University of Washington, adds:  “Together, this body of work suggests the tax is having the intended health benefits and this new evidence gives reason to believe health benefits could be larger for households with lower incomes.”

Studies have established that regular consumption of sugar-sweetened beverages increases the chances of mortality caused by type 2 diabetes. 

Regressive taxation

According to the authors, policymakers should particularly take note of their findings concerning low-income households, as they are statistically most likely to consume sugar sweetened beverages. This further responds to concerns that the taxes in question are regressive, thus hitting the poorest the hardest.

Previous research conducted at the same university determined that lower-income and higher-income households paid about the same amount toward this tax on sweetened beverages, with lower-income households spending a higher proportion of their income.

In the UK, a similar “soft drink levy” has also been found to adequately decrease the consumption of such drinks, as well as to alleviate risk from various adjacent diseases, leading experts to call for broader coverage.

The issue of sugary beverage consumption and the subsequent adverse health effects is global, as a recent investigation into it revealed that young people in countries with emerging economies are consuming such beverages at an alarming rate.