One of the arguments the soldiers of Big Soda—and sometimes, their well-meaning compatriots—have used against taxes on sugar-sweetened beverages is that they won’t change consumer behavior. And, of course, they’ve been able to maintain that fiction, until now, because they’ve scrapped relentlessly to defeat proposals in the US.
But in Mexico, such a tax was instituted at the beginning of 2014, and researchers from Mexico’s National Public Health Institute and the University of North Carolina and have preliminary data on its effect.
Guess what? Make a product more expensive, and people will buy less—across the board and in increasing over time, just like one would expect. The tax is one peso per liter, which is about 10 percent.
The average decline over the course of the year was 6 percent, but had reached 12 percent by December. All socioeconomic levels showed decreases, but it was greatest among the least affluent, where the decline was 9 percent for the year, and 17 percent by December. Households in 53 cities of at least 50,000 population were studied.
Fear not, people are still drinking. Sales of untaxed beverages increased about 4 percent. Just like you'd expect.
According to a press release, the research team included M. Arantxa Colchero and Juan A. Rivera, both of Instituto Nacional de Salud Pública INSP, and Barry M. Popkin and Shu Wen Ng of the University of North Carolina.
Source: www.michaelprager.com