Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Economics Issues from
Ed Dolan’s Econ Blog
The Economics
of a Soda Tax
Updated March 23, 2016
Terms of Use: These slides a...
Tax Flavor of the Year: A Soda Tax
 In 2014, Berkeley, California became
the first city in the US to institute a tax
on s...
Elasticity of Demand for Soda (1)
 The effectiveness of a tax depends,
in part, on how sensitive soda
consumption is to a...
Elasticity of Demand for Soda (2)
 The effectiveness of a tax depends, in
part, on elasticity of demand
The more elastic...
Effect of a Tax on Prices
A soda tax has three main effects
 It raises the price paid by consumers
from P0 to P1
 It low...
Tax Revenue
 The tax revenue received by the
government is equal to the amount
of the tax multiplied by the after-tax
qua...
Deadweight Loss
A tax also produces a deadweight loss,
shown by the triangle
 Part of the deadweight loss
represents lost...
Negative Externalities and Social Cost
 If consumption of a good harms other
people, it is said to have a negative
extern...
Offsetting social cost with a “sin tax”
 A tax on a good that has harmful
social costs is often called a “sin tax”
 If t...
Are Soda Taxes Good Public Policy?
Even if soda taxes work, are they good public policy? According to a
thorough study by ...
Click on the image to learn more about
Ed Dolan’s Econ texts
or visit www.bvtpublishing.com
For more posts and slideshows,...
Upcoming SlideShare
Loading in …5
×

Are Soda Taxes Good Public The Economics of a Soda Tax

12,149 views

Published on

Are Soda Taxes Good Public Policy?
Even if soda taxes work, are they good public policy? According to a
thorough study by Donald Marron and others at the Tax Policy Center:
 Well-designed taxes can encourage people to make healthier eating and
drinking choices and can encourage businesses to develop and market
healthier products.
 However, soda taxes are regressive—they place a relatively greater burden on
people with lower incomes
 Unlike smoking, many people consume moderate amounts of SSBs without
harm to their health
 The bottom line: Taxes are an imperfect instrument for addressing nutrition and
health concerns, but they may make sense as part of larger policy efforts
related to obesity and excess sugar consumption
Updated Mar. 23, 2016 Ed Dolan’s Econ Blog
Donald Marron et al., “Should We Tax Unhealthy Food and Drinks?” Tax Policy Center Dec. 2015

Published in: Economy & Finance
  • Be the first to comment

×