In their Correspondence (March 19, p 1162),1 Peter Scarborough and colleagues correctly quote us as saying that “the efficacy of [a sugary drinks tax] will depend on what products [consumers] switch to and how firms change their prices”, stating that we “based [our] conclusions on economic theory without reference to the evidence”.
We agree that the magnitude of consumer response is an empirical question. Our Green Budget chapter2 neither supported nor opposed the proposed sugary drinks tax, but rather aimed to highlight some of the complexities surrounding such a tax and where the evidence base should be improved. We also do not dispute the unsurprising finding that consumption of sugary drinks fell in countries in which a sugary soft drinks tax had been introduced.
We disagree, however, that concerns about substitution responses can be lightly dismissed.
In Budget 2016 the Chancellor announced a “soft drinks industry levy” due to take effect from April 2018. The charge will be levied on soft drinks that contain added sugar and is aimed at “help[ing] tackle childhood obesity.” It has followed calls from various bodies for intervention to reduce people’s sugar consumption. In a new IFS briefing note we examine the main sources of dietary sugar purchased by households and lay out some of the economic issues related to the introduction of a tax on sugar. We also consider the rationale behind government intervention of this sort.
In the recent Budget, the Chancellor introduced a tax on the sugar content of soft drinks, citing concerns about childhood obesity. This tax will be introduced in 2018 and will not apply to fruit juices or milk-based drinks. It has followed calls from various bodies for intervention to reduce people’s sugar consumption. In this briefing note, we provide some descriptive evidence on the main sources of dietary sugar and we lay out some of the economic issues related to the introduction of a tax on sugar.
Over the Great Recession, UK households reduced real food expenditure. We show that they were able to maintain the number of calories that they purchased, and the nutritional quality of these calories, by adjusting their shopping behaviour.
What explains the variation in how income changes as people age? Using household panel data, we investigate the contribution of different time-varying factors in explaining variation in income changes over prime working-age life (between 35-44 and 50-59). We find that demographic changes, such as acquiring or losing a partner and the entry or exit of children to and from the household, account for a larger share of the variation in household income changes than shifts in employment status or occupation.
Whyy has obesity risen despite us eating less? Rachel Griffith and Pierre Dubois talk about her work, which showed how the amount of exercise we get from modern life has played a massive role. Rachel Griffith was elected President of the European Economic Association for 2015.
Rachel gave the Pre...
