Current Soda Taxes Not High Enough to Curb Obesity, Study Finds

Current state taxes and levies on soft drinks are slowing consumption and resulting in slimmer waistlines, but the effect is generally small in magnitude, newly published research by the Yale School of Public Health has found. The study appears in the journal Contemporary Economic Policy.

Assistant professor Jason M. Fletcher of Yale analyzed the effectiveness of various forms of soda taxation on body mass index (BMI) over a 16-year period. With colleagues from Bates College and Emory University, Fletcher found that an individual’s weight only mildly responds to changes in taxation—a 1 percent tax increase resulted in a BMI decrease of 0.003 points, which is less than a tenth of a pound for a man of average height.

“Our results suggest that the current low, hidden rates of soft drink taxation in most states are not effective in substantially changing adult consumption,” Fletcher said. “Our results leave open the possibility that large taxes that are communicated to consumers are still worthwhile to consider as policy options, but small tax changes will not work.”

The average current tax rate on soda is about 3 percent, though many states are contemplating further increases.

Soft drinks have come under increased scrutiny in recent years as a source of obesity in children as well as adults and as a contributor to a range of chronic diseases such as diabetes and heart complications. As a result, many states are turning to a “sin” tax to combat steadily growing rates of consumption. Higher taxes than what are currently imposed on soda have been used—with generally effective results—on tobacco and alcohol.

Fletcher, along with David Frisvold of Emory and Nathan Tefft of Bates, analyzed the impact of soda taxation on BMI in various states from 1990 to 2006. Their results indicated that soda taxation has a greater BMI effect on those with lower incomes and that the result is more pronounced for females and middle-aged and older individuals. In all cases, though, the effects on obesity were very small.

The study was funded by the Robert Wood Johnson Foundation.

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Media Contact

Michael Greenwood: michael.greenwood@yale.edu, 203-737-5151

Helen Dodson: helen.dodson@yale.edu, 203-436-3984