The effects of taxing sugar-sweetened beverages in Ecuador: An analysis across different income and consumption groups

PLoS One. 2020 Oct 13;15(10):e0240546. doi: 10.1371/journal.pone.0240546. eCollection 2020.

Abstract

To analyze the effects of taxing sugar-sweetened beverages (SSBs) in Ecuador, this study estimates a Quadratic Almost Ideal Demand System model using data from the 2011-2012 National Survey of Income and Expenditure for Urban and Rural Households. We derive own- and cross-price elasticities by income quintiles and consumption deciles for five beverages, including two types of sugary drink: (i) milk, (ii) soft drinks, (iii) water, (iv) other sugary drinks, and (v) coffee and tea. Overall, results show that a 20% increase in the price of SSBs will decrease the consumption of soft drinks and other sugary drinks by 27% and 22%, respectively. Heterogeneous consumer behavior is revealed across income and consumption groups, as well as policy-relevant complementarity and substitution patterns. Policy impacts are simulated by considering an 18 cents per liter tax, implemented in Ecuador, and an ad-valorem 20% tax on the price. Estimated tax revenues and weight loss are larger for the latter. From a health perspective, high-income and heavy consumer households would benefit the most from this policy. Our study supports an evidence-based debate on how to correctly design and monitor food policy.

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • Consumer Behavior / economics
  • Consumer Behavior / statistics & numerical data*
  • Ecuador
  • Energy Intake / physiology
  • Family Characteristics
  • Humans
  • Income / statistics & numerical data
  • Models, Economic
  • Nutrition Policy / economics*
  • Overweight / etiology
  • Overweight / physiopathology
  • Overweight / prevention & control*
  • Sugar-Sweetened Beverages / adverse effects
  • Sugar-Sweetened Beverages / economics*
  • Sugar-Sweetened Beverages / statistics & numerical data
  • Surveys and Questionnaires / statistics & numerical data
  • Taxes*

Grants and funding

Funding for this research was granted by the XVI call for research projects by the Research Department of University of Cuenca (DIUC), Cuenca, Ecuador. Funder website: https://www.ucuenca.edu.ec/investigacion.