Seattle Sweetened Beverage Tax Evaluation: Impact on Prices - - PowerPoint PPT Presentation

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Seattle Sweetened Beverage Tax Evaluation: Impact on Prices - - PowerPoint PPT Presentation

Aug 28, 2022 127 likes •366 views

Seattle Sweetened Beverage Tax Evaluation: Impact on Prices 6-month results Presented by: Jesse Jones-Smith, PhD, MPH SBT IMPACT ON BEVERAGE PRICES THE GOAL rice of beverages subject to the tax. To estimate th the i imp mpact o t of th

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Seattle Sweetened Beverage Tax Evaluation: Impact on Prices 6-month results

Presented by: Jesse Jones-Smith, PhD, MPH

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SBT IMPACT ON BEVERAGE PRICES

THE GOAL

To estimate th the i imp mpact o t of th the t tax o

  • n th

the p pri rice of beverages subject to the tax.

THE BASICS

A R A RETAI AIL A AUDIT P PRE an and P POST T TAX AX I IMPLEMENTATION: In-person surveys of beverage prices stores in Se Seattle and Comparison Area (Kent, Auburn, Federal Way) be before and and aft fter tax: PR PRE-TA TAX Survey November 2017 6-MO MONTH PO POST-TA TAX Survey June 2018 Tax starts January 2018

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Distributors TAX

SBT PRICE IMPACT PRICE PASS-THROUGH

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TAX IS LEVIED ON DISTRIBUTORS, UNCLEAR WHETHER DISTRIBUTORS WOULD PASS ON THE COST OF THE TAX TO THE CONUMER.

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Methods & Results

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SBT PRICE IMPACT DATA COLLECTION

In-person surveys of stores in Se Seattle and Co Comp mparison Area (Kent, Auburn, Federal Way) Surveys done Oct ctober-No Novem ember er 2017 2017 (pre-tax) and Ma May-Ju July 2018 2018 (post-tax) Geographically balance ced sample with quota from different store types

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SBT PRICE IMPACT DATA COLLECTION

Supermarkets & superstores Grocery & drug stores Small stores Warehouses Quick-service restaurants Beverage shops

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SBT PRICE IMPACT STORE SAMPLE

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SBT PRICE IMPACT STORE SAMPLE

Se Seattle le Com Compar aris ison

  • n Area

Fa Fall 2017 Su Summer 2018 Fa Fall 2017 Su Summer 2018

229 204 223 209

89% 89% re re-sur urvey rate 90% 90% re re-sur urvey rate

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SBT PRICE IMPACT BEVERAGE CATEGORIES

BE BEVERAGE TYPE BE BEVERAGE TAX CA CATEGORIES Ta Taxed

  • 7 be

beverages type pes

  • Soda
  • juice drink
  • sports drink
  • energy drink

bottled tea

  • prepared tea
  • bottled coffee
  • sugary flavor shot

No Non-taxed d sug ugar-fr free ee 10 be beverages type pes:

  • diet soda
  • 100% juice
  • diet sports drink
  • diet energy drink
  • water
  • Milk
  • powdered sugar-free

drink mix

  • bottled unsweetened

tea

  • prepared coffees
  • sugar-free flavor shot

No Non-taxed d sug ugar-sweetene ned 3 be beverages type pes:

  • chocolate milk
  • powdered drinks
  • prepared sweetened

coffee

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SBT PRICE IMPACT KEY VARIABLES

The primary outcome, in CE CENTS PER OUNCE CE, using the lowest price available on the day the store was surveyed. BE BEVERAGE PRICE CE

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SBT PRICE IMPACT STATISTICAL ANALYSES

THE GOAL

To estimate the impact of the tax on the price of beverages subject to the tax.

THE MODEL

We use a regression-based dif differenc nce-in in-dif differenc nce mode del to estimate th the d degree t to wh which th the pr pric ice of be beverag ages in in Seattle le chang hanged d abo above and and be beyond nd price changes for th the s same me b beverages i in th the c comp mpari rison a area from baseline to six-months post-tax.

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RETAIL AUDIT TAX IMPACT ANALYSES

HOW THE DIFFERENCE-IN-DIFFERENCE MODEL WORKS

$2. $2.00 00 November 2017 $2. $2.05 05 June 2018

Co Compari rison Area

$2. $2.00 00 November 2017 $2. $2.35 35 June 2018

Se Seattle

=

$0. $0.35 35

=

$0. $0.05 05

$0. $0.30 30

DIFFERENCE IN SEATTLE DIFFERENCE IN COMPARISON DIFFERENCE-IN-DIFFERENCE

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Distributors TAX

SBT PRICE IMPACT PRICE PASS-THROUGH

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THE AMOUNT OF TAXED PASSED ON TO CONSUMERS

1.75₵/OZ = 100%

PASS THROUGH

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SBT PRICE IMPACT RESULTS

OVERALL AVERAGE SEATTLE PRICE PASS-THROUGH RESULTS

1.70₵ 97%

The price of taxed beverages in Seattle incr creased by 1.70 ce cents per ounce ce

  • n average, over and

above increases in the comparison area. 97% o 97% of t the t e tax on average was pa passed d th through to Seattl tle co consumers. TH THE E AVER ERAGE GE MASKS IMPO PORTANT T DIFFER EREN ENCES BY ST STORE E TY TYPE PE AND BEV EVER ERAGE GE TY TYPE PE

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SBT PRICE IMPACT RESULTS

AVERAGE PRICE PASS-THROUGH BY

BY BEVERAGE TYPE

1.78₵

102%

Pass-through for Seattle

so soda

Pass-through for Seattle

su sugar-sw sweetened teas & & sports ts drin inks.

1.47₵

84%

Pass-through for Seattle

juice e drinks.

1.11₵

63%

Pass-through for Seattle

su sugar-sw sweetened Bo Bottled coffee drinks.

1.09₵

62%

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SBT PRICE IMPACT RESULTS

AVERAGE TAXED DRINK PRICE PASS-THROUGH BY

BY STORE TYPE

1.51₵

86%

Pass-through in Seattle

su superm rmark rkets s & su superstores

Pass-through in Seattle

gr groc

  • cery stor
  • res

& & drug stores

1.82₵

104%

Pass-through in Seattle

sm small stores

1.80₵

103%

Pass-through in Seattle

qui quick-se service re resta taurants

1.43₵

82%

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SBT PRICE IMPACT RESULTS

AVERAGE NON

NON-TA TAXED DRINK PRICE PASS-THROUGH BY ST STORE TYPE

0.0₵

0%

Pass-through in Seattle

su supermarkets s & su superstores.

Pass-through in Seattle

gr grocery y stores & dr drug ug st store res.

0.47₵

27%

Pass-through in Seattle

sm small stores.

0.77₵

44%

*Increase in price in small stores driven by increased price of diet soda, diet energy drinks, and bottled tea

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SBT PRICE IMPACT RESULTS

OVERALL SEATTLE PRICE RESULTS

Applying the average 1.7 .70 ce cents pe per r ounce unce incr ncrease to

$1. $1.99 99 Pre-tax $2. $2.33 33 Post-tax $3. $3.15 15 Pre-tax $5. $5.59 59 Post-tax

20 20 oz sugar-sw sweetened drink 12 12-pac pack of sug ugar ar-sw sweetened drinks

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SBT PRICE IMPACT RESULTS

PRICE TAG LABELING STRATEGIES

No No tax x mention

  • n price tag

45%

Tax pri price ce incl nclude uded d in price on price tag, and identified as an add-on

24%

Tax pri price ce incl nclude uded in price on price tag, not identified as an add-on

11%

Price tag says tax will be adde dded d at the he register but does not include add-on price on tag

17%

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SBT PRICE IMPACT LIMITATIONS

Although we surveyed a large sample of beverages of various sizes, we di did no not me measure all beverages. We have on

  • nly a s

a sam ampl ple of stores es rather than a census of all stores. We did not incl clude some popular stores such as Whole Foods, Trader Joe’s, and PCC because these stores devote relatively little shelf space to sugary beverages.

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SBT PRICE IMPACT KEY TAKEAWAYS

Ta Tax on sugary be beverages i is be being ng pa passed t d thr hroug ugh t h to co consumers via higher retail price ces of these beverages. Price ces incr creased statistically significantly fo for nearly all beverages types subject ct to th the tax. Price increases di differed d by by beverage type, with the largest incr creases for so sodas s and energy drinks. Price increases di differed b d by st store type. Increased across store types, but lar largest incr creases in smaller groce cery st stores, small st stores, and drug drug s stores

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THANK YOU