Published Date: May 15, 2023

Summary: While a 2021 federal commission recommended that the United States government levy a sugar-sweetened beverage (SSB) tax to improve diabetes prevention and control efforts, evidence is limited regarding the longer-term impacts of SSB taxes on SSB purchases, health outcomes, costs, and cost-effectiveness. This study estimates the impact and cost-effectiveness of an SSB tax levied in Oakland, California.

An SSB tax ($0.01/oz) was implemented on July 1, 2017, in Oakland. The main sample of sales data included 11,627 beverage products, 316 stores, and 172,985,767 product-store-month observations. The main analysis, a longitudinal quasi-experimental difference-in-differences approach, compared changes in beverage purchases at stores in Oakland versus Richmond, California (a nontaxed comparator in the same market area) before and 30 months after tax implementation (through December 31, 2019). Additional estimates used synthetic control methods with comparator stores in Los Angeles, California.

Estimates were inputted into a closed-cohort microsimulation model to estimate quality-adjusted life years (QALYs) and societal costs (in Oakland) from six SSB-associated disease outcomes.

This study uses 2019 California Health Interview Survey (CHIS) data.

Findings: In the main analysis, SSB purchases declined by 26.8% in Oakland after tax implementation, compared with Richmond. There were no detectable changes in purchases of untaxed beverages or sweet snacks or purchases in border areas surrounding cities. In the synthetic control analysis, declines in SSB purchases were similar to the main analysis. The estimated changes in SSB purchases, when translated into declines in consumption, would be expected to accrue QALYs and significant societal cost savings over 10 years, with greater gains over a lifetime horizon. Study limitations include a lack of SSB consumption data and use of sales data primarily from chain stores.

An SSB tax levied in Oakland was associated with a substantial decline in volume of SSBs purchased, an association that was sustained more than two years after tax implementation. This study suggests that SSB taxes are effective policy instruments for improving health and generating significant cost savings for society.

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