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The effect of a soft drink tax in Mexico: evidence from time‐series industry data

The effect of a soft drink tax in Mexico: evidence from time‐series industry data We use a time‐series approach and industry data to estimate the effect on consumption of a relatively large excise tax on soft drinks imposed recently in Mexico. The tax caused a price increase of 12.8 per cent and reduced per‐capita consumption about 3.8 per cent. This effect is small in comparison with the effects that are suggested by most studies that estimate price elasticities using an almost ideal demand system and household survey data. Moreover, we find that the effects of the tax on consumption vary throughout the year. The effect of the tax tends to be higher in the winter but vanishes during the summer. We also find that the effect of the tax does not vary from one year to another. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Australian Journal of Agricultural Resource Economics Wiley

The effect of a soft drink tax in Mexico: evidence from time‐series industry data

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References (30)

Publisher
Wiley
Copyright
Copyright © 2021 Australian Agricultural and Resource Economics Society Inc.
ISSN
1364-985X
eISSN
1467-8489
DOI
10.1111/1467-8489.12418
Publisher site
See Article on Publisher Site

Abstract

We use a time‐series approach and industry data to estimate the effect on consumption of a relatively large excise tax on soft drinks imposed recently in Mexico. The tax caused a price increase of 12.8 per cent and reduced per‐capita consumption about 3.8 per cent. This effect is small in comparison with the effects that are suggested by most studies that estimate price elasticities using an almost ideal demand system and household survey data. Moreover, we find that the effects of the tax on consumption vary throughout the year. The effect of the tax tends to be higher in the winter but vanishes during the summer. We also find that the effect of the tax does not vary from one year to another.

Journal

The Australian Journal of Agricultural Resource EconomicsWiley

Published: Apr 1, 2021

Keywords: ; ; ; ;

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