Weighing in on why soda tax won’t work

NORTHWESTERN (US) — Obese people are more likely to drink diet soda, so a tax on sugary drinks will not only not curb obesity, it could also penalize people who aren’t overweight.

An amendment to a bill in the Illinois Senate calls for adding a penny an ounce to the cost of most soft drinks with added sugar or sweeteners, including soda, sweet iced tea, and coffee drinks. The legislation excludes artificially sweetened and diet sodas.

“After doing the analysis, it really turns out to be the case that obese people like diet soda so much more than regular soda that you can do whatever you want to the price,” says Ketan Patel, a fourth-year doctoral student in economics at Northwestern University.

“You’re not going to get that much change in obese people’s weight because they already drink diet soda.”

Patel says he initially didn’t know if the diet soda preference was going to be a large factor in evaluating the effectiveness of the soda tax.

“The concern I had was that maybe obese people are less price sensitive,” Patel says. “So if obese people are less price sensitive, then raising the price through a tax will affect their behavior less.”

But that concern became irrelevant since diet drinks are not being considered in the proposed obesity tax. Beyond its ineffectiveness in reducing obesity, such a tax also would punish consumers that are not overweight or obese, Patel says.

Increasing the tax could conceivably have an effect on weight, but it would depend on whether people are at a stable weight or whether they are already eating too many calories and therefore their weight will continue to increase.

If increasing weights are the status quo, then a tax could prevent people who are currently overweight or normal weight from becoming obese.

For the study, Patel used a large data set of sodas price and sales data with individual demographic characteristics and body mass index (BMI) to estimate consumer preferences.

After obtaining estimates of consumer preferences, Patel simulated how a tax would change the choices that consumers make and used the results of the simulation to estimate changes in weight using a weight change model from existing nutrition literature.

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