Premium
THE IMPACT OF SODA SALES TAXES ON CONSUMPTION: EVIDENCE FROM SCANNER DATA
Author(s) -
Colantuoni Francesca,
Rojas Christian
Publication year - 2015
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/coep.12101
Subject(s) - consumption (sociology) , difference in differences , economics , sales tax , matching (statistics) , soft drink , public economics , business , agricultural economics , econometrics , tax reform , ad valorem tax , mathematics , food science , statistics , social science , chemistry , sociology
Scientific evidence on the effect of sugar consumption on obesity has propelled policy makers in several states across the United States to propose the imposition of a tax on soft drinks sales. In this article, we look at the effect of two tax events: a 5.5% sales tax on soft drinks imposed by the state of Maine in 1991 and a 5% sales tax on soft drinks levied in Ohio in 2003. We investigate this question by using sales data collected by scanner devices in the two states, where soda taxes where enacted as well as on neighboring states. We employ a difference‐in‐difference matching estimator (DIDM) that, in our setting, permits the comparison among treatment and control groups based on brand identity. Results suggest that neither sales tax had a statistically significant impact on the consumption of soft drinks. This finding is robust to several alternative specifications. ( JEL D12, H22, C90, L66)