Sugar…do-do-do-do-do-do

“Sugar, rum, and tobacco are commodities which are nowhere necessaries of life, [but] which are…objects of almost universal consumption, and which are therefore extremely proper subjects of taxation.” Adam Smith, The Wealth of Nations

The rationale for taxation of sugar-sweetened beverages has been discussed extensively in the literature as a method to reduce the increasing rates of obesity associated with the consumption of these calorie-rich beverages. The current study was undertaken to evaluate how the price of sugar-sweetened beverages affects their consumption in a wide range of households in Brazil given that a paucity of research exists, particularly in non-developed countries, that actually evaluates the behavioral outcomes of such taxation.

The study design used was one of a retrospective logistic regression to assess the primary outcome variable of price elasticity coefficients (simply put, the percentage variation in the consumption of sugar-sweetened beverages given a 1 percent variation in the price). Researchers hypothesized that sugar-sweetened beverage consumption would decrease with increasing price (i.e. taxation) in all households. The primary data set used for the regression analysis was from the 2002-2003 Household Budget Survey carried out by the Brazilian Institute of Geography and Statistics. The data contained 1 week of records of detailed food purchases per household collected among  48,470 households. The households were selected by a cluster sampling procedure so as to reflect known proportions of geographic and socioeconomic variability within the overall population of Brazil. Food eaten in restaurants outside the home was not accounted for and data validity measures for the records of food purchase were not included (although there were interviewers from the study who instructed and collected the records found in booklets from each household).

The results suggested that the increase in the price of sugar-sweetened beverages led to reductions in consumption. When all households were compared, those with higher incomes purchased more sugar-sweetened beverages on a per calorie basis (14 Calories per adult per day vs. 49 Calories per adult per day). Consumption of sugar-sweetened beverages, once adjusted for income, demonstrated that as price increased (relative to other foods and beverages) consumption decreased. Ultimately, the price elasticity for sugar-sweetened beverages averaged -0.85. Put another way, for every increase of 1.00 percent increase in price, Brazilian households would be 0.85 percent less likely to purchase sugar-sweetened beverages. However, household income influenced price elasticity. The price elasticity of poor households was almost twice the size of that for non-poor households (-1.03 versus -0.63) suggesting that taxation of sugar-sweetened beverages would disproportionately impact the poor in Brazil.

Commentary

The disproportionate effects of taxation on consumption of sugar-sweetened beverages amongst the poor in this study is an important factor to note. This suggests that at a certain point, healthier and/or cheaper alternatives such as water become more palatable due to economic pressures. However, the poor in Brazil are not the largest consumers of sugar-sweetened beverages overall; in fact, the rich consume more. Therefore, decreased consumption of sugar-sweetened beverages amongst the poor might not reverse obesity trends in the population as a whole.

Additionally, the data set is limited to consumption of sugar-sweetened beverages at home. Relationships between consumption behavior outside the home may vary widely amongst households and thus have a huge effect on obesity trends. This was not addressed at all. For instance, in the United States many families eat 1/3rd of their meals outside the home.  Extrapolation of these results to predict effects of soda taxation on American consumption behaviors would prove difficult if not impossible.

Claro RM, et al. Sugar-Sweetened Beverage Taxes in Brazil. Am J Public Health. 2011 Nov 17. [Epub ahead of print]

by

Jennifer Shine Dyer, MD, MPH, FAAP

Editor’s note: A prior quasi-experimental study based in the United States suggests that current soda taxes would do little to curb the obesity epidemic. However, a recent Health Affairs study using modeling techniques opposes such view.