Taxes on unhealthy foods and sweetened beverages, as well as subsidies to healthy foods, have become increasingly popular strategies to curb obesity and related non-communicable diseases. The existing evidence on the welfare effects of such fiscal policies is mixed and almost uniquely focused on tax schemes. Using the 2016-2017 Chilean Household Budget Survey, we estimate a censored Exact Affine Stone Index (EASI) incomplete demand system and simulate changes in purchases, tax incidence, and consumer welfare of three different policy scenarios: (1) a 5 percentage point additional tax on sweetened beverages (currently taxed at 18%) and a new 18% tax on sweets and snacks, (2) a healthy subsidy by zero-rating fruits and vegetables from the current 19% value-added tax, and (3) a combined (tax plus subsidy) policy. Under full pass-through of these policies, the combined scheme captures the incentives to switch purchases from both single-policy alternatives, resulting in a net welfare gain and subsidy transfer for the average Chilean household. In terms of welfare, low-income households strictly benefit from a combined policy, while high-income households experience a small consumer welfare loss, resulting in re-distributional effects.

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Introduction: U.S. policy actions focus on reducing sugar-sweetened beverage purchases. Yet, there are no studies on trends in overall purchase distribution and how it has changed by key subpopulations. This study examined changes in distributions of total sugar-sweetened beverage purchases and its major subtypes (regular carbonated soft drinks and fruit/sports/energy drinks) in 2002−2014 and distinguished among low, moderate, and high purchasers.Methods: Longitudinal data on sugar-sweetened beverage purchases of U.S. households from the 2002−2014 Nielsen Homescan Panel were used. Sugar-sweetened beverages were defined as all caloric non-alcoholic beverages containing added sugars. Longitudinal quantile regression model examined trends across distributions (from quantile 25 to 95) of purchases (measured in kcal/day/ capita), while accounting for households' unobserved differences. All statistical analyses were conducted in 2019.Results: All households across the total purchase distribution significantly reduced their purchases. High purchasers made less proportional reductions than low purchasers (e.g., 35% at 95th quantile vs 62% at 25th quantile). However, the smaller relative reductions among higher purchasers translated into larger absolute decreases (e.g., 134 kcal/day/capita at 95th quantile vs 23 kcal/ day/capita at 25th quantile). Similar patterns in heterogeneity were observed across sugar-sweetened beverage subtype distributions and among racial/ethnic and income groups. In addition, there were significant racial/ethnic and income disparities in total sugar-sweetened beverage purchases in 2002−2003. Although racial/ethnic disparities among higher purchasers improved, income disparity patterns at all purchase levels persisted into 2013−2014.Conclusions: From 2002-2003 to 2013−2014, U.S. households at all purchase levels made meaningful reductions in sugar-sweetened beverage purchases in both absolute and relative terms. Furthermore, racial/ethnic disparities in total sugar-sweetened beverage purchases narrowed, but income disparity patterns persisted.