New Research on the Berkeley Soda Tax

You may remember the discussion surrounding a research paper released back in August that used interviews and survey data to suggest that the tax on sodas that went into place in Berkeley caused a significant reduction in soda consumption.  

As several other locales are considering new soda taxes in the upcoming election season, this sort of research is valuable in trying to sort out the potential effects of the policies.  

Now there is new research by Scott Kaplan, Rebecca Taylor, and Sofia Villas-Boas at UC Berkely.  The authors utilize a dataset on retail sales of various drinks in dining locations at "a large university" - presumably Berkeley.  Importantly, the authors do not actually look at the effect of the implementation of the tax, but rather they look at what happened to soda sales because of the publicity and information surrounding the vote.  That is, they look at soda sales surrounding the time of the vote but before the tax actually went into place.

Here is a figure from the paper summarizing the main findings: 

The authors write:

We find a 30% drop in soda sales relative to other product groups during the post-election
period. In a related and contemporaneous study using survey data, Falbe et al. (2016) find
an average 21% drop in SSB quantity sold. However, because the surveys were completed
only before the election and after the tax implementation, Falbe et al. (2016) are unable to
distinguish whether this effect was from the campaign and election or from the tax itself.
Our results show that soda sales fell on-campus after the soda tax election yet before prices
changed due to the tax. This suggests that comparing pre-campaign to post-implementation
consumption may confound a tax effect with an information effect. This has important
implications for external validity. If the Berkeley SSB tax is replicated elsewhere without
a proceeding campaign war and affirmative election outcome, its effects on consumption
may differ substantially. In other words, given the amount of money spent in the Berkeley
campaign on each side of the battle, it is important to understand how much behavioral
change was due to the election and how much was due to the tax itself.

My take on the results is that these soda tax policies may well have sizable "signaling" or "information" effects aside from whatever pecuniary effects exist.  I have found similar results related to animal welfare regulations: that the publicity surrounding a vote has a significant impact on what people buy aside from whatever impacts the policy actually has on the price or foods offered.  In short: information dissemination campaigns may be as important or more important than taxes or bans on products.  In my assessment, information policies are often far more justifiable than are more coercive policies that restrict choice. 

It will be interesting to see as future research emerges whether and how the actual implementation of the tax changes soda consumption and how long lasting are these information effects.