A calorie-based SSB tax is more effective than an ounce-based tax because it achieves more calorie reduction with a smaller loss in consumer surplus. The authors propose a new product-level demand model to compare the efficiency of calorie-based and ounce-based taxes. This model, in contrast to the category-level demand models used in existing research, allows the analysis of product-level substitutions.
About the Study
This study aimed to determine the most effective type of SSB tax by comparing the effects of taxing sugar-sweetened beverages (SSBs) by calories and by ounces, using supermarket scanner sales data for 178 nonalcoholic beverages across four New York markets.