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Current Soda Taxes Not Enough to Curb Obesity, Study Finds

October 16, 2009
by Michael Greenwood

Current state taxes and levies on soft drinks are slowing consumption and resulting in slimmer waistlines, but the effect is generally small in magnitude, newly published research by the Yale School of Public Health has found.

Assistant professor Jason M. Fletcher analyzed the effectiveness of various forms of soda taxation on body mass index (BMI) over a 16-year period. With colleagues from Bates College and Emory University, Fletcher found that an individual’s weight does respond to changes in taxation—a 1 percent tax increase resulted in a BMI decrease of 0.003 points, which is less than a tenth of a pound for a man of average height

“Our results suggest that the current low, hidden rates of soft drink taxation in most states are not effective in substantially changing adult consumption,” Fletcher said. “Our results leave open the possibility that large taxes that are communicated to consumers are still worthwhile to consider as policy options, but small tax changes will not work.”

The average current tax rate on soda is about 3 percent, though many states are contemplating further increases. The paper was published this week in the journal Contemporary Economic Policy.

Soft drinks have come under increased scrutiny in recent years as a source of obesity in children as well as adults and as a contributor to a range of chronic diseases such as diabetes and heart complications. As a result, many states are turning to a “sin” tax to combat steadily growing rates of consumption. Similar approaches have been used—with generally effective results—on tobacco and alcohol.

Fletcher, along with David Frisvold of Emory and Nathan Tefft of Bates, analyzed the impact of soda taxation on BMI in various states from 1990 to 2006. Their results indicated that soda taxation has a greater BMI effect on those with lower incomes and that the result is more pronounced for females, middle-aged and older individuals. In all cases, though, the effects on obesity were very small.

Fletcher said one reason that soda taxation may have limited results on BMI is because there are so many alternative beverages with similar calories content available to consumers. Another issue with soft drink taxation is that it will likely disproportionately affect the poor.

“Our research team is currently examining whether taxes may lower consumption and weight for children. Like the results for adults, we are finding small reductions in weight for children, but they are drinking more milk and less soda due to the taxes, which likely increases health,” he said.

The study was funded by the Robert Wood Johnson Foundation.

Submitted by Denise Meyer on August 03, 2012