Seattle soda tax encourages switch to beer
Taxes can change behavior. Economists have known this for decades, but politicians…not so much. An example of how taxes can change behavior comes from Seattle, where local pols decided to place high taxes on soda (to encourage healthier habits, of course)
The result? Residents started buying…more beer, instead:
“The good people of Seattle responded to a tax on sugary drinks by buying more beer,” Christopher Snowdon, director of Lifestyle Economics at the Institute of Economic Affairs and a leading critic of the nanny state, tweeted after the study’s release.
The PLoS study, by University of Illinois-Chicago researchers Lisa M. Powell and Julien Lader, compared sales of beer in Seattle both before and since adoption of the soda tax with comparable sales in nearby Portland, Oregon, which has no soda tax.
“At two-years post-tax implementation, [the] volume sold of beer in Seattle relative to Portland increased by 7%,” the authors report. Though supporters of soda taxes claim (largely without evidence) that they’re a successful tool to combat obesity, the authors of the PLoS study note that the dangers of “excess alcohol consumption [include] higher risk of motor accidents/deaths, liver cirrhosis, sexually transmitted diseases, crime and violence, and workplace accidents.” Also: obesity.
Once again, economics offers a lesson in substitution that was obvious to everyone not in elected office.