Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/323766 
Year of Publication: 
2025
Citation: 
[Journal:] The Scandinavian Journal of Economics [ISSN:] 1467-9442 [Volume:] 127 [Issue:] 3 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2025 [Pages:] 576-612
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
This paper identifies missing markets for the sugar content of sugar‐sweetened beverages (SSBs) as a novel foundation of soft drink taxation. If the social marginal value of sugar content is negative, then missing price signals imply an inefficiently high sugar content. Efficiency is restored with a tax on the sugar content per unit of the SSB, augmented by a subsidy on the SSB. In an empirical calibration to the UK, the optimal SSB subsidy is small, whereas the optimal sugar content tax is £0.38 per liter and, thus, one and a half to two times larger than the tax rates implemented by the UK's soft drink levy.
Subjects: 
Obesity
sugar‐sweetened beverages
sugar content
soft drink levy
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Published Version

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