The Impact of Soda Taxes
In a new working paper (joint with Anna Tuchman and Song Yao), we study how consumers reacted to the Philadelphia soda tax using detailed supermarket scanner data. We find that the tax leads to a 34% price increase and a 46% reduction in sales in Philadelphia. There is no substitution to untaxed beverages (water and natural juices), but a large amount of cross-shopping to stores outside of Philadelphia. After taking into account cross-shopping, the total demand reduction is equal to only 22%. We do not detect a significant reduction in calorie and sugar intake.