Venue: The Fuqua School of Business, Duke University, 1 Towerview Drive, Durham, NC 27708-0120

 

Presentation

Can Soft Drink Taxes Reduce Population Weight?

Authors: Jason M. Fletcher (Yale University); David Frisvold (University of Michigan); Nathan Tefft (University of Wisconsin-Madison)

Presenter: Nathan Tefft (University of Wisconsin-Madison)

Discussant: Timothy Classen (Loyola University Chicago)

Session: Reducing Obesity

Room: Classroom F

When: Tuesday 8:30 a.m. - 10 a.m.

Soft drink consumption has been hypothesized as one of the major factors in the growing rates of obesity in the US. Throughout the 1990s, approximately half of all states taxed soft drinks and 20 states changed their soft drink tax rate. In this paper, we evaluate the impact of changes in state soft drink taxes on body mass index (BMI). In particular, we follow the literature on cigarette taxation and estimate state and year fixed effects models using the 1990-2002 repeated cross-sections of the Behavioral Risk Factor Surveillance System (BRFSS). Using this strategy, the impact of soft drink tax rates on individuals' weight is identified from changes in the tax rate within states over time. Our results suggest that soft drink taxes modestly reduced BMI and that this impact varies across demographic groups. These results are robust to a variety of specifications, including controlling for state-specific time trends. If the soft drink tax was as large as the current tax on cigarettes, extrapolation of our results suggests that the proportion of obese adults would decrease by nearly one percentage point. A soft drink tax potentially is a relatively efficient yet regressive revenue source.