Investigation of spillover effects of a sugar-sweetened beverage tax on beverage purchasing in a nearby, non-taxed area: A quasi-experimental, difference-in-differences analysis

TL;DR

This study examines if a sugar-sweetened beverage tax in Seattle affected purchasing in nearby areas, finding no significant spillover effects.

Contribution

The study provides new evidence on the absence of spillover effects of SSB taxes in non-taxed nearby communities.

Findings

No significant change in SSB purchasing was observed in nearby communities after the tax implementation.

A 20% decline in taxed beverage sales was found in Seattle due to the tax.

There was suggestive evidence of increased sales of taxed and nontaxed soda in nearby areas.

Abstract

Evidence suggests that sugar-sweetened beverage (SSB) taxes reduce SSB purchasing and improve health outcomes in the taxed area. The extent to which purchasing also changes in nearby communities due to tax signaling effects is unclear. The objective of this study was to assess whether the SSB tax in Seattle, Washington, USA, influenced SSB purchasing in nearby communities within the same media market. We used retail scanner data on weekly sales of 3,531 beverages from 127 retailers in King County excluding Seattle and its bordering area (KC), and 243 retailers in a matched comparison area outside the regional media market. Matching was done via Mahalanobis distance based on pre-tax, county-level demographic measures from the American Community Survey. We estimated linear difference-in-differences in mean volume sold of taxed and nontaxed beverages comparing two years before (2016−2017) and after tax implementation (2018−2019) adjusting for beverage-level fixed effects. We also estimated the difference-in-differences in Seattle versus a matched comparison to estimate the tax effect in Seattle as context for potential effects in KC. For taxed beverages, the mean difference-in-differences in volume sold in KC was 172 liters (95% CI: −1,396, 1,740; P = 0.83), reflecting a 1% change from pre-tax levels in KC for a given beverage. There was suggestive evidence of increased volume sold for taxed and nontaxed soda, and taxed multipack beverages in KC relative to the comparison area. In Seattle, the mean difference-in-differences in volume sold for taxed beverages was −3,628 liters (95% CI: −4,622, −2,634; P < 0.001), reflecting a 20% decline for a given beverage in association with the tax. We did not find evidence of spillover effects in the form of reduced volume sold of SSB in communities near but not bordering the tax in Seattle. Studies in other contexts are needed to investigate spillover on purchasing as well as possible explanations for observed increases in purchases of taxed and nontaxed soda.

Figures