Soda Taxes.

• Author: Van Doren, Peter

* "The Effectiveness of Sin Food Taxes: Evidence from Mexico," by Arturo Aguilar, Emilio Gutierrez, and Enrique Seira. December 2019. SSRN #3510243.

Mexico's tax on non-diet soda has been hailed for reducing consumption with possible long-term health benefits. In a previous Working Papers column (Winter 2017-2018) I discussed a paper that argued that the reduced-soda-consumption effect was likely overstated because of substitution from expensive soda brands to cheaper store brands.

This paper utilizes Mexican retail scanner data containing weekly purchases of 47,973 barcodes by 8,130 households to examine the effect of the soda tax as well as a companion 8% sales tax on high-caloric-density food (defined as containing more than 275 kilocalories per 100 grams). The taxes are relatively large (about three times that of the average state-level soda tax in the United States) and have a fairly broad base: they apply to 39.4% of food products and 46.3% of beverage products in the...