The impact of taxing sugar-sweetened beverages on cola purchasing in Catalonia: an approach to causal inference with tim
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ORIGINAL PAPER
The impact of taxing sugar‑sweetened beverages on cola purchasing in Catalonia: an approach to causal inference with time series cross‑sectional data Lluc Puig‑Codina1 · Jaime Pinilla3 · Jaume Puig‑Junoy2 Received: 24 February 2020 / Accepted: 10 November 2020 © Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract Sugar-sweetened beverage (SSB) taxes related to the quantity of sugar have appeared as a popular regulatory tool around the world during the last decade showing important variations in their implementation and impact. We evaluated the impact of a new SSB tax implemented in Catalonia since May 1, 2017 on the purchased quantities and penetration rates of taxed and untaxed cola beverages. We use aggregate time series of cola beverages purchases in all 17 Spanish Autonomous Communities before and after the implementation of the SBB tax in Catalonia, from January 2013 to June 2019. A comparison between two different types of causal inference methods was conducted: a two-way fixed effects difference in differences model and a modified synthetic control model. Regular cola purchases decreased 12.1% and their penetration rate decreased by 1.27 points during the two post-intervention years using the preferred model. Diet cola purchases increased 17.0% and their penetration rate also increased by 1.65 points. Only regular cola results were robust to all placebo test checks. The SSB tax implemented in Catalonia in 2017 significantly reduced the volume and penetration rates of regular colas with no robust evidence for the substitution effect on diet colas. Keywords Sugar-sweetened beverages · Taxes · Soda tax · Sugar consumption JEL Classification H20 · H51 · C22
Introduction Taxes on sugar-sweetened beverages (SSBs) are becoming a popular class of the so-called “sin taxes” which may be applied to different categories of drinks with caloric sweeteners, such as carbonated soft drinks, sports drinks, fruit drinks, energy drinks, sweetened milk, coffee, and tea [1, 2]. The rationale for SSBs taxes lies in their power to change consumer behaviour towards reducing consumption and * Jaume Puig‑Junoy [email protected] 1
Dep. de Fundamentos del Análisis Económico, Universidad de Alicante, Alicante, Spain
2
Barcelona School of Management, Pompeu Fabra University (BSM-UPF), C/Balmes 132‑134, 34‑08008 Barcelona, Catalonia, Spain
3
Department of Quantitative Methods in Economics, University of Las Palmas de Gran Canaria, Las Palmas, Spain
promoting health, generate revenues, and incentivize product reformulation [2, 3]. SSBs’ high consumption may result in important externalities and internalities that may be reduced by effective SSBs taxes [1]. Externalities are mainly the health care, non-health care, and productivity social costs paid by public health systems and society from diseases and health problems caused by SSB consumption (weight gain, diabetes, cardiovascular diseases, cancers, and dental caries). The principal internalities are those costs that consumers
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