A new study from the University of Washington has found that taxes on sweetened beverages lead to a nearly 50% reduction in consumption among lower-income households, highlighting the potential for improved public health and reduced health disparities.
New research from the University of Washington reveals that taxes on sugar-sweetened beverages have slashed consumption by almost half among lower-income households in several major U.S. cities. The findings suggest that such taxes could play a crucial role in reducing health disparities and enhancing overall population health.
The study, published in Health Economics, scrutinized purchasing behaviors across approximately 400 households in cities like Seattle, San Francisco, Oakland and Philadelphia — all of which recently introduced taxes on sweetened beverages.
The results are striking: lower-income households decreased their purchases of sweetened beverages by 47%, while higher-income households also showed a reduction, albeit a smaller one at 18%.
“If households reduce their sugar intake, they will experience health benefits,” co-author Melissa Knox, an associate teaching professor of economics at UW, said in a news release.
Knox emphasized the significance of the findings, noting that sweetened beverages are one of the largest sources of sugar in the American diet and contribute to numerous health issues, including obesity and Type 2 diabetes.
“Sweetened beverages are one of the largest sources of sugar in the American diet. They have all kinds of health consequences and don’t really provide any nutrition,” added Knox. “The idea with the tax is that lower-income people, because they reduce their intake more, receive greater health benefits than the higher-income households.”
The study utilized data from the Nielsen Consumer Panel, tracking household purchases with handheld scanners for a year before and after the tax implementation.
The researchers found that prices for taxed beverages increased significantly, particularly for lower-income households — showing a 22% price hike compared to an 11% increase for higher-income households. Importantly, there was no significant increase in cross-border shopping to evade the tax.
“We also looked at untaxed beverages and found that lower-income households are substituting with untaxed beverages,” Knox added. “They’re using some of their money to go buy a different beverage, rather than buying a candy bar instead of buying a Coke.”
This research is pivotal for policymakers who are keen to reduce health disparities exacerbated by higher sugar consumption in lower-income communities. The study indicates that lower-income households, who pay a higher proportion of their income toward these taxes, gain substantial health benefits and contribute to funding local health programs.
Previous research from UW showed that the annual net benefit to lower-income communities from these taxes ranged from $5.3 million to $16.4 million across several U.S. cities.
Further research from the University of Washington also demonstrated that the tax correlates with declines in childhood body mass index in Seattle, suggesting broader public health benefits.
“Together, this body of work suggests the tax is having the intended health benefits and this new evidence gives reason to believe health benefits could be larger for households with lower incomes,” co-author Jessica Jones-Smith, a professor of health systems and population health at UW, said in the news release.