The Impact of Taxes and Price Promotions on Sugar-Sweetened Beverage Consumption

Excessive consumption of sugar-sweetened beverages (SSBs) is a risk factor for obesity, cardiovascular diseases, type-2 diabetes, and other chronic conditions. The high SSB consumption may be partly due to the low price relative to other beverages. Policies targeting SSB prices, such as soda taxes, have been increasingly implemented as a public health measure to reduce sugar consumption and/or a mean to increase revenue for other public services. Philadelphia is the first large city in the US implemented such tax on January 1, 2017. The Philadelphia beverage tax is 15 cents per oz., which applies to both sugar-sweetened and diet beverages (SSDB). There is limited empirical evidence of beverage tax impacts on consumption, especially in the longer term. Beverage consumption data were collected from participants in Philadelphia and nearby comparison cities before and one year after the Philadelphia beverage tax. I conducted a difference-in-difference analysis was conducted and found no major change in Philadelphians' consumption one-year following the tax (Aim 1). Price promotion, or temporary price reduction, is commonly used to provide economic incentive for purchasing. An intervention targeting price promotion has been proposed as an alternative approach to reduce SSB consumption. However, the evidence on the association between price promotion and consumption is extremely limited. I used data from a large, nationally representative consumer panel and linked retail scanner database to quantify the association between exposure to SSB price promotion and annual household consumption. I found that increases in annual promotion frequency in stores were associated with increases in household SSB purchases (Aim 2). I then explored the role of price promotion and price promotion related shopping behavior in explaining the income gradient in SSB purchase. Exposure to price promotion was similar across income groups, but lower income households made frequent trips and small purchases while higher income households the opposite. The inverse income gradient in SSB purchases remained strong and significant even after accounting for the exposure to price promotion and different shopping behaviors (Aim 3). These findings suggest that restricting price promotions may be effective in reducing SSB consumption, and it may have similar impact across income groups.