Taxing on sugary beverages won't reduce obesity rates

Taxing sugary beverages may not be as helpful in reducing calorie intake, as consumers tend to substitute for other unhealthy foods, a new study has revealed.

The study, by researchers at RTI International, Duke University, and the US Department of Agriculture, found that the reduction in sugary beverages due to a soda tax would likely lead consumers to substitute those calories by increasing their calorie, salt and fat intake from untaxed foods and beverages.

"Instituting a sugary beverage tax may be an appealing public policy option to curb obesity, but it's not as easy to use taxes to curb obesity as it is with smoking," Chen Zhen, Ph.D., a research economist at RTI, and the paper's lead author, said.

"Consumers can simply substitute an untaxed high calorie food for a taxed one. And as we know, reducing calories is just one of many ways to promoting healthy eating and reducing nutrition-related chronic disease," Zhen said.

The study also examined differences in purchase behavior between lower and higher income households.

Compared to higher income families' purchases, foods and beverages purchased by lower income families tend to be higher in calories, fat and sodium content on average.

"Because lower-income families tend to buy more sugary soft drinks than higher income families, they would more readily reap the health benefits of reduced sugary beverage intake," Zhen said.

"However, they would also pay more in beverage taxes, making it a regressive tax," the researcher added.

The study is published in the American Journal of Agricultural Economics.