Expenditure Effects from the 2010 Washington Soda Tax

Abstract

This study examines the 2010 Washington excise soda tax and its effects on household soda expenditures. Findings show that soda expenditures fell by approximately $2.26 per week following the tax. When matched with households in Oregon using a propensity score matching model to create a control group, the decrease in Washington household spending on soda exceeded that of Oregon households in all model specifications. Matched against households located anywhere in the U.S., Washington households' expenditures fell by between $1.24 and $1.92 more per week than control group households following the soda tax. After the tax's repeal, Washington soda expenditures remained below their previous pre-tax level. The evidence suggests the tax acted similar to a public health warning against soda and snack foods, as snack food expenditures also declined despite no added tax.