Growing Revenue and Shrinking Waistlines: Are Soda Taxes a Win-Win Model in Middle Income Countries?

Consumption of sugar-sweetened beverages (SSBs), which can lead to weight gain, is rising in middle-income countries (MICs) in tandem with the prevalence of obesity. Evidence from high-income countries suggests that taxing sodas may reduce consumption, and governments in many MICs are considering such taxes. In this seminar, Sharon Nakhimovsky and Andrea Feigl will present findings from a systematic review of ten observational studies from Brazil, Ecuador, India, Mexico, Peru, and South Africa that assess post-tax price increases, change in demand for SSBs and other products overall and by socio-economic groups, and the effect of SSB price change on obesity prevalence. The review indicates that price increases from a tax may result in reduced consumption of SSBs. Evidence also suggests a negative relationship between SSB prices and obesity prevalence, after accounting for substitution effects. Based on this analysis, taxes on SSBs may be a promising policy tool for MICs to address rising obesity prevalence.