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CRES Seminar - Fabrice Etile (Paris School of Economics)

CRES Seminar - Fabrice Etile (Paris School of Economics)

March 27th at 12h

09.03.2017

The Incidence of Soft-drink Taxes on Consumer Prices: Evidence from the French “Soda Tax” (Joint with S. Lecocq and S. Boizot-Szantaï)

Date: March 27th at 12h

Room: 23.103

Abstract

Public health advocates have proposed taxing Sugar-Sweetened Beverages (SSB) to curb the rise of obesity and diabetes. The effectiveness of this policy depends crucially on the incidence of a tax on consumer prices. We here use Kantar WorldPanel Homescan data to evaluate the incidence of the French soda tax, which is a unit excise tax of 0.0716 Euro/Liter on sugar-sweetened beverages implemented in January 2012. We construct a local nested-CES exact price index for aggregate SSB consumption, which accounts for product heterogeneity, variations in product availability and consumer taste across markets and time, and consumer ability to substitute between product varieties. We then find that the soda tax has had a small yet significant impact on the price of soft-drinks (around +0.8\%), corresponding to a pass-through of 51\%. We do not find evidence of heterogeneity in incidence across income groups or consumption levels. Overall, our findings support the assumption that SSB taxes effectively affect prices. But they also imply that ex-ante evaluation studies tend to be over-optimistic about the pass-through rates of behavioural taxes.


 

Biography

Fabrice Etile is a Research Professor at the Paris School of Economics and the French National Institute for Agronomic Research (INRA). He works mainly on risky health behaviours (obesity and food-related diseases, addictive goods), with a specific focus on the analysis of consumer behaviour and the econometric evaluation of public policies.

https://sites.google.com/site/fabriceetile/

 

 

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