Evaluation of the sugar-sweetened beverage tax in Oakland, United States, 2015-2019: A quasi-experimental and cost-effectiveness study

Author summary Why was this study done? Several US cities have implemented a sugar-sweetened beverage (SSB) tax aimed at reducing SSB consumption. Yet, there remains relatively little evidence regarding the sustained effects of SSB taxes.Few prior studies of SSB taxes have accounted for the multiple ways consumers might compensate for a tax.Evidence regarding the cost-effectiveness of SSB taxation in the US has been based on projections of a national tax, rather than empirical estimates from local taxes. What did the researchers do and find? We applied difference-in-differences and synthetic control approaches comparing changes in SSB purchases before versus after the SSB tax in Oakland with changes in comparator areas.The excise tax was associated with a 26.8% reduction in SSB purchases in Oakland during the first 30 months after tax implementation, based on the difference-in-differences analysis. The results were similar using a synthetic control approach. We do not find evidence of cross-border shopping or caloric substitution resulting from implementation of the tax.We used the estimated effects of Oakland's SSB tax as an input into a microsimulation model of the quality-adjusted life years (QALYs) and societal costs from 6 SSB-associated disease outcomes.The reduction in SSB purchases implied improvements in health outcomes (0.15% QALYs gained) and substantial cost savings (>$100,000 per 10,000 people) over a 10-year horizon, with larger gains over a lifetime horizon. What do these findings mean? Our findings suggest that local SSB taxes can improve dietary intake and result in meaningful improvements in health. They are also expected to generate cost savings.These results provide additional support for a recent recommendation to Congress from a federal diabetes commission to implement a national excise tax on SSBs. BackgroundWhile 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. Methods and findingsAn 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 6 SSB-associated disease outcomes. In the main analysis, SSB purchases declined by 26.8% (95% CI -39.0 to -14.7, p < 0.001) 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 (-22.4%, 95% CI -41.7% to -3.0%, p = 0.04). The estimated changes in SSB purchases, when translated into declines in consumption, would be expected to accrue QALYs (94 per 10,000 residents) and significant societal cost savings (>$100,000 per 10,000 residents) 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. ConclusionsAn SSB tax levied in Oakland was associated with a substantial decline in volume of SSBs purchased, an association that was sustained more than 2 years after tax implementation. Our study suggests that SSB taxes are effective policy instruments for improving health and generating significant cost savings for society.