Impact of Soft Drink Prices on Obesity Levels: Evidence for the U.S. Open Access

Ramirez-Garces, Simon (Fall 2019)

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Soft drinks consumption has been widely linked to overweight and obesity, especially in developed countries. In this paper I study the effect of changes in soft drink prices on overweight and obesity for the United States from 2011 to 2018. Using data from the Cost of Living Index (COLI) by the Council for Community and Economic Research (C2ER), the unemployment rate from the Bureau of Labor Statistics (BLS), and eight waves of the BRFSS by the Centers for Disease Control and Prevention (CDC), I estimate two-way fixed effect OLS and linear probability models. I calculate two different types of effects: the average impact of soft drink prices on BMI and the effect of soft drink prices within different categories of income by including interactions between prices and levels of income. Results suggest that higher soft drink prices have a significant effect on reducing BMI. However, on average, prices do not affect the probability to become obese or overweight. Furthermore, I find that the impact of soft drink prices on different categories of income is heterogeneous; individuals with distinct levels of income are affected differently by changes in prices of soft drinks.

Table of Contents

Introduction 1

Literature review 2

Data 4

Methodology 6

Results 10

Conclusions 15

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