In a variety of studies, taxes on sugary drinks are credited with reducing soda consumption by making the sweet beverages more expensive. The taxes may actually have a much smaller impact on how consumers view the sodas, say the authors of a study on the “non-pecuniary (non-price) effects of sugar-sweetened beverage (SSB) policies.”
Authors Sunjin Ahn and Jayson Lusk started with the premise that the taxes and the accompanying publicity around them would be a cue to consumers about the relative healthfulness of the beverages and which of them were “socially acceptable.” They recruited consumers for simulated shopping excursions during which they might be told the price of soda went up because of a tax, because of a shortage of sugar — or they might be given no reason at all. In other simulations, consumers were told super-sized sodas were banned by the government, were unavailable due to a plastic shortage, or were simply not available. In a 2016 trial, some people “bought” soda because they were told it was taxed.
Ahn and Lusk repeated the trial in 2019, with some refinements. “What did we find with these newer data? On average: nothing, nada, zilch,” wrote Lusk in a blog on Wednesday. “There was no significant difference in the average market share of SSBs across the various information treatments. However, we did find significant variability in the treatment effects, meaning some people chose more SSBs when they knew it was a tax/ban and others chose less.”
“In summary,” he wrote, “our results didn’t provide a clear answer on the question we sought out to address: Non-pecuniary effects, to the extent they exist, seem to work in different ways for different people, making the net effect small and hard to identify, at least in our experimental setting.”
Soda taxes have been promoted as a public health measure to reduce obesity and related chronic diseases and as a way to raise revenue for local programs, such as preschools.
Ahn is a post-doctoral research assistant in agricultural economics at Mississippi State University. Lusk is head of the agricultural economics department at Purdue University. Their paper was published by the American Journal of Agricultural Economics.