The impact of taxing sugar‐sweetened beverages in México: A censored QUAI demand system approach

In 2014, México imposed a 20% price hike on sugar-sweetened beverages (SSB) to curb its obesity epidemic, paving the road for other Latin-American countries adopt similar measures. This paper estimates beverage demand system with censored Quadratic Almost Ideal Demand system. Our study finds that tax SSB can reduce consumption between 16.6% and 19.0%. Additionally, increase is associated increased water if an equivalent income compensation accompanies fiscal approach. Finally, while effect small, our results indicate education primary demographic factor in decreasing consumption.