The Health and Financial Impacts of A Sugary Drink Tax Across Different Income Groups in Canada

• Author / Creator

  Kao, Kai-Erh

• Obesity remains a leading health issue and contributes to health inequality. Overconsumption of sugar-sweetened beverages (SSBs) contributes to both childhood and adult obesity, and also increases healthcare costs. Sugary drink taxes have been implemented to curb sugar intake in several countries. However, there is a concern that sugary drink taxes are regressive. This project assessed the health and financial impacts of a sugary drink tax by different income groups in Canada.
  The current study extended Jones’ Canadian sugary drink tax model to estimate the impact of a sugary drink tax on health and financial inequality. Sugary drinks consist of all types of beverages containing free sugar, including regular carbonated soft drinks, regular fruit drinks, non-diet sports drinks, non-diet energy drinks, sugar-sweetened coffee and tea, hot chocolate, non-diet flavoured water, flavoured milk, sugar-sweetened drinkable yogurt, and 100% juice. Income-specific parameters include: population demographics, cross- and own-price elasticities, mean BMI, sugary drink consumption, mortalities, and disease epidemiology.
  Our result shows that, overall, a 20% sugary drink tax was estimated to reduce the consumption of sugary drinks by an average of approximately 15%, with the lowest income quintile having a slightly greater reduction than other income quintiles.
  The estimated mean reduction in BMI ranged from 0.21 to 0.33 depending on sex and income quintile. These reductions were greater among the lower income quintiles for both females and males, and lessened as income increased.
  The 20% sugary drink tax was estimated to avert approximately 690,000 DALYs over a lifetime period among the 2016 Canadian adult population. The lowest income quintile had the most estimated DALYs averted per person.
  Lifetime health care savings were estimated to be $2.27, $2.16, $2.17, $2.12, and $1.98 billion for quintile 1 to quintile 5, respectively. The lowest income quintile had the greatest estimated health care savings per person.
  The estimated annual tax burden for the whole 2016 Canadian population (including children) was $1.4 billion. The average tax burden was estimated to be $39.00 to $44.30 per person, with the middle-income quintile bearing the heaviest burden. The lowest income quintile would pay the highest proportion of after-tax income in tax. A 20% sugary drink tax is regressive, but the estimated difference in annual tax burden was less than $6 per person.
  In conclusion, the model predicts that low-income Canadians would gain the most health from a sugary drinks tax. While this income group would pay the largest proportion of their incomes in tax, the difference between income groups is small. If this regressivity is a concern, then policy makers may wish to consider investing the revenue raised from sugary drinks taxes in policies that address health or income inequalities.

• Subjects / Keywords

  • health equality
  • Health economics
  • sugar tax
  • obesity

• Graduation date

  Fall 2019

• Type of Item

  Thesis

• Degree

  Master of Science

• DOI

  https://doi.org/10.7939/r3-qjtp-ex07

• License

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