Predicting the Effects of Sugar-Sweetened Beverage Taxes on Food and Beverage Demand in a Large Demand System.
A censored Exact Affine Stone Index incomplete demand system is estimated for 23 packaged foods and beverages and a numéraire good. Instrumental variables are used to control for endogenous prices. A half-cent per ounce increase in sugar-sweetened beverage prices is predicted to reduce total calories from the 23 foods and beverages but increase sodium and fat intakes as a result of product substitution. The predicted decline in calories is larger for low-income households than for high-income households, although welfare loss is also higher for low-income households. Neglecting price endogeneity or estimating a conditional demand model significantly overestimates the calorie reduction.
Research Triangle Institute.
Chen
C
Zhen
Duke-Singapore National University Medical School.
Eric A
EA
Finkelstein
Research Triangle Institute.
James
J
Nonnemaker
Research Triangle Institute.
Shawn
S
Karns
U.S. Department of Agriculture, Economic Research Service.
Jessica E
JE
Todd
censored demand; obesity; price endogeneity; sugar-sweetened beverage tax