Impacts of Sweetened Beverage Taxes on Price, Reformulation, Consumption, and Health: Evidence from The Republic of Ireland and the United Kingdom

Abstract

In this thesis, I examine tiered sugar sweetened beverage (SSB) taxes that were implemented in 2018 in Ireland and the United Kingdom, and their impact on prices, ingredient formulation, consumption, and health outcomes. Leveraging product-specific consumer price index (CPI) data from the Central Statistics Office (CSO) of Ireland and from the Office for National Statistics (ONS) of the United Kingdom as well as ingredient volume data from Euromonitor International, I used difference-in-difference (DID) models to estimate price and ingredient responses of soft drinks relative to similar products. My findings indicate that UK soft drink prices initially decreased after the announcement of the tax but rose after the implementation. When the tax announcement was the treatment, the average price response in the United Kingdom was not significant, while the average ingredient response was a 9.30% fall in sugar content. When the tax implementation was the treatment, there was a 6.17% rise in price accompanied by a 10.02% fall in sugar content. In contrast, effects in Ireland were muted. Event plots show no initial drop in prices after the tax announcement and a modest rise in prices after implementation, leading to an aggregate 3.25% increase in price and 1.44% decrease in sugar content when the announcement was the treatment, and a 4.74% increase in price and 1.94% decrease in sugar when the implementation was the treatment. To understand the long-term health impacts implied by the taxes, I combined my DID results with price elasticities of demand from previous literature to compute back-of-the-envelope estimates of the change in calorie intake and BMI. I show that, although the price and ingredient results indicate a differential response to the tax in Ireland and the United Kingdom, neither tax is expected to greatly impact an average soft drink consumer’s calorie intake. Thus, the implied long-run health benefits are minimal.