Research Article: Evaluating the 2014 sugar-sweetened beverage tax in Chile: An observational study in urban areas

Date Published: July 3, 2018

Publisher: Public Library of Science

Author(s): Ryota Nakamura, Andrew J. Mirelman, Cristóbal Cuadrado, Nicolas Silva-Illanes, Jocelyn Dunstan, Marc Suhrcke, Claudia Langenberg

Abstract: BackgroundIn October 2014, Chile implemented a tax modification on sugar-sweetened beverages (SSBs) called the Impuesto Adicional a las Bebidas Analcohólicas (IABA). The design of the tax was unique, increasing the tax on soft drinks above 6.25 grams of added sugar per 100 mL and decreasing the tax for those below this threshold.Methods and findingsThis study evaluates Chile’s SSB tax, which was announced in March 2014 and implemented in October 2014. We used household-level grocery-purchasing data from 2011 to 2015 for 2,836 households living in cities representative of the urban population of Chile. We employed a fixed-effects econometric approach and estimated the before–after change in purchasing of SSBs controlling for seasonality, general time trend, temperature, and economic fluctuations as well as time-invariant household characteristics. Results showed significant changes in purchasing for the statistically preferred model: while there was a barely significant decrease in the volume of all soft drinks, there was a highly significant decrease in the monthly purchased volume of the higher-taxed, sugary soft drinks by 21.6%. The direction of this reduction was robust to different empirical modelling approaches, but the statistical significance and the magnitude of the changes varied considerably. The reduction in soft drink purchasing was most evident amongst higher socioeconomic groups and higher pretax purchasers of sugary soft drinks. There was no systematic, robust pattern in the estimates by household obesity status. After tax implementation, the purchase prices of soft drinks decreased for the items for which the tax rate was reduced, but they remained unchanged for sugary items, for which the tax was increased. However, the purchase prices increased for sugary soft drinks at the time of the policy announcement. The main limitations include a lack of a randomised design, limiting the extent of causal inference possible, and the focus on purchasing data rather than consumption or health outcomes.ConclusionsThe results of subgroup analyses suggest that the policy may have been partially effective, though not necessarily in ways that are likely to reduce socioeconomic inequalities in diet-related health. It remains unclear whether the policy has had a major, overall population-level impact. Additionally, because the present study examined purchasing of soft drinks for only 1 year, a longer-term evaluation—ideally including an assessment of consumption and health impacts—should be conducted in future research.Trial registrationClinicalTrials.gov Identifier: NCT02926001

Partial Text: Reducing the global burden of noncommunicable diseases (NCDs) has been widely recognised as a global health priority [1]. Diet-related health problems account for a large and growing share of the NCD burden worldwide, causing substantial human suffering and adverse economic consequences [2,3]. The situation is of particular concern in Latin America and the Caribbean—a region that has been predicted to reach the highest levels of overweight and obesity worldwide by 2030 [4].

Table 1 shows the descriptive statistics of products and households from January 2011 to December 2015.

This study assessed the short-term (12 months after the implementation) changes in household-level purchasing of soft drinks after the Chilean SSB tax, controlling for regional economic conditions, regional temperature, and long-term seasonal fluctuations, as well as households’ time-invariant characteristics. Our main estimates suggest a significant, sizeable reduction in the volume of high-tax soft drinks purchased (21.7%), which was also reflected in a decrease in the amount of purchased added sugar from soft drinks (15.1%). In contrast, we did not find any significant increase in the volume of low-tax items purchased.

Source:

http://doi.org/10.1371/journal.pmed.1002596

 

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