Start Date: January 2011

ID #: 68637

Principal Investigator: Lisa Powell, PhD

Organization: University of Illinois at Chicago

Funding Round: Rapid-Response Round 3

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A number of states and cities are considering the imposition of a sugar-sweetened beverage (SSB) tax aimed at reducing consumption and raising tax revenue to fund anti-obesity programs. The major research question that will be addressed by this study is: What is the net employment impact of reductions in SSB consumption that would result from significant SSB taxes? This study will assist policy-makers by providing independent and more comprehensive evidence on the net employment effects of SSB taxes that correctly takes into consideration not only the reductions in SSB beverage consumption as claimed by industry, but also the job gains due to the alternative consumption of non-taxed beverages and the offsetting increase in employment from the jobs generated by the new tax revenues. This project will use the structural input-output Regional Economic Models, Inc. (REMI) model, which contains a large array of econometrically estimated parameters of the economy that will be used to simulate the implementation of SSB taxes on employment. Analyses will be undertaken for the U.S. as a whole and regionally for two states (California and Illinois) and two cities (New York City and Philadelphia). Researchers hypothesize that spending on alternative beverages and government spending associated with the tax revenue will offset job losses associated with the reduced consumption of SSBs.

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