I have written before about soda bans, and why I think they’re somewhat misguided. There were loopholes to get around them, they arbitrarily focused on some size beverages, and they were somewhat haphazardly enforced. But I left myself open to the idea of a soda tax – which seems less forceful – and a number of governments have attempted them.

In last month’s Health Affairs, researchers report on the effects of a sugar-sweetened beverage tax that had been in place for two years. Mexico implemented the 1 peso per liter excise tax in the beginning of 2014. This was in response to their own obesity epidemic, where about 70% of adults and 30% of children were overweight or obese by 2012.

More than 12% of calories consumed in a day in 2012 were from added sugars. About 70% of the added sugars consumed were from sugar-sweetened beverages. Those alone accounted for almost 10% of Mexicans’ total energy intake.

On average, in urban areas, it appears that the tax was passed on entirely to consumers through an increase in prices for sugar-sweetened beverages. It was hoped that this might (1) bring in revenue and (2) lead to reduced consumption of them. Initial findings showed this to be the case, but it wasn’t known whether these changes wound persist. Since the tax hasn’t increased yet, and inflation has occurred, the power of the tax might have lessened as well.

The researchers used store purchase data for more than 6600 households both before (2012 through 2013) and after (2014 through 2015) the tax went into effect. They used two models to estimate changes in purchases.

They modeled changes in the monthly volume of both taxed and untaxed beverages purchased. They accounted for a variety of economic and household factors, as well as seasonality. They used separate models for each post-tax year; the first compared 2012-2013 with 2014, and the second compared 2012-2013 with 2015. For each, they compared the predicted volume of beverages that would have been purchased using pre-tax year data with the actual volume of beverages purchased in post-tax years.

They found that there was an average decline in the purchase of sugar-sweetened beverages of 5.5% in 2014 and 9.7% in 2015, for an average decline of 7.6% over the entire study period. Untaxed beverages, on the other hand, increased by 2.1% over the study period. These findings held for all three socioeconomic levels that were examined, but the absolute and relative reductions were highest for the poorest participants.

As with any study, there are limitations that warrant consideration. This study was not a controlled trial, and we can’t be certain of causality. Something else might be at play, but they did account for as many trends and confounders as possible. Mexico has also passed a tax on nonessential energy-dense food, which could have also influenced beverage purchase. It’s also possible that given all the bad press about sugar-sweetened beverages in the media, people would have reduced their purchases even without a tax.

Even so, studies like this show that people will change their habits of consumption based on price. Moreover, the long-term effects may be even greater than the short-term ones. This is similar to what we’ve seen in studies of other habit-forming items, like tobacco. This study adds to the empirical evidence showing that taxing things like added sugars may be a viable alternative to improve our population-level nutrition.

Author, Member

Aaron E. Carroll, MD, MS

The Incidental Economist

Aaron E. Carroll, MD, MS is a Professor of Pediatrics and Associate Dean for Research Mentoring at Indiana Uni... Read Bio