Skip to main content
Key Specialties
Cardiology Diabetology Endocrinology Gastroenterology Geriatrics and Gerontology Gynecology and Obstetrics Hematology Infectious Disease Internal Medicine Nephrology Neurology Oncology Pediatrics Respiratory Medicine Rheumatology Surgery
Congress Coverage
2024 ACC Congress 2023 ESMO Congress 2023 EASD Congress 2023 ERS Congress 2023 ESC Congress 2023 EHA Congress 2023 ASCO Annual Meeting
Clinical Collections
Advances in Alzheimer’s

At a glance: The ONWARDS insulin icodec trials

A round-up of the ONWARDS phase 3 clinical trials evaluating the novel weekly insulin icodec in people with diabetes.
ADVANCED SEARCH
Log in
Top
BMC Public Health
Published in: BMC Public Health 1/2017

Open Access 01-12-2017 | Research article

Price elasticity of the demand for soft drinks, other sugar-sweetened beverages and energy dense food in Chile

Authors: Carlos M. Guerrero-López, Mishel Unar-Munguía, M. Arantxa Colchero

Published in: BMC Public Health | Issue 1/2017

Login to get access

Abstract

Background

Chile is the second world’s largest per capita consumer of caloric beverages. Caloric beverages are associated with overweight, obesity and other chronic diseases. The objective of this study is to estimate the price elasticity of demand for soft drinks, other sugar-sweetened beverages and high-energy dense foods in urban areas in Chile in order to evaluate the potential response of households’ consumption to changes in prices.

Methods

We used microdata from the VII Family Budget Survey 2012–2013, which collects information on expenditures made by Chilean urban households on items such as beverages and foods. We estimated a Linear Approximation of an Almost Ideal Demand System Model to derive own and cross price elasticities of milk, coffee, tea and other infusions, plain water, soft drinks, other flavored beverages, sweet snacks, sugar and honey, and desserts. We considered the censored nature of the data and included the Inverse Mills Ratio in each equation of the demand system. We estimated a Quadratic Almost Ideal Demand System and a two-part model as sensitivity analysis.

Results

We found an own price-elasticity of −1.37 for soft drinks. This implies that a price increase of 10% is associated with a reduction in consumption of 13.7%. We found that the rest of food and beverages included in the demand system behave as substitutes for soft drinks. For instance, plain water showed a cross-price elasticity of 0.63: a 10% increase in price of soft drinks could lead to an increase of 6.3% of plain water. Own and cross price elasticities were similar between models.

Conclusions

The demand of soft drinks is price sensitive among Chilean households. An incentive system such as subsidies to non-sweetened beverages and tax to soft drinks could lead to increases in the substitutions for other healthier beverages.
Literature
1.
Malik VS, Willett WC, Hu FB. Global obesity: trends, risk factors and policy implications. Nat Rev Endocrinol. 2013;9(1):13–27.CrossRefPubMed
2.
Lim SS, Vos T, Flaxman AD, Danaei G, Shibuya K, Adair-Rohani H, Amann M, Anderson HR, Andrews KG, et al. A comparative risk assessment of burden of disease and injury attributable to 67 risk factors and risk factor clusters in 21 regions, 1990–2010: a systematic analysis for the Global Burden of Disease Study 2010. Lancet. 2012;380(9859):2224–60.CrossRefPubMedPubMedCentral
3.
4.
5.
Araneda J, Bustos P, Cerecera F, Amigo H. Intake of sugar-sweetened non-alcoholic beverages and body mass index: A national sample of Chilean school children. Salud Publica Mex. 2015;57(2):128–34.CrossRefPubMed
6.
Malik VS, Popkin BM, Bray GA, Despres JP, Willett WC, Hu FB. Sugar-sweetened beverages and risk of metabolic syndrome and type 2 diabetes: a meta-analysis. Diabetes Care. 2010;33(11):2477–83.CrossRefPubMedPubMedCentral
7.
Malik VS, Schulze MB, Hu FB. Intake of sugar-sweetened beverages and weight gain: a systematic review. Am J Clin Nutr. 2006;84(2):274–88.PubMedPubMedCentral
8.
Te Morenga L, Mallard S, Mann J. Dietary sugars and body weight: systematic review and meta-analyses of randomised controlled trials and cohort studies. BMJ. 2013;346:e7492.CrossRef
9.
Vartanian LR, Schwartz MB, Brownell KD. Effects of soft drink consumption on nutrition and health: a systematic review and meta-analysis. Am J Public Health. 2007;97(4):667–75.CrossRefPubMedPubMedCentral
10.
Tavares LF, Fonseca SC, Garcia Rosa ML, Yokoo EM. Relationship between ultra-processed foods and metabolic syndrome in adolescents from a Brazilian Family Doctor Program. Public Health Nutr. 2012;15(1):82–7.CrossRefPubMed
11.
Asfaw A. Does consumption of processed foods explain disparities in the body weight of individuals? The case of Guatemala. Health Econ. 2011;20(2):184–95.CrossRefPubMed
12.
Popkin BM, Hawkes C. Sweetening of the global diet, particularly beverages: patterns, trends, and policy responses. Lancet Diabetes Endocrinol. 2015. Published online.
13.
Silva P, Durán S. Bebidas azucaradas, más que un simple refresco. Rev Med Chil. 2014;41(1):90–97.
14.
Crovetto MM, Uauy R. Changes in the consumption of dairy products, sugary drinks and processed juices in the Chilean population. Rev Med Chil. 2014;142(12):1530–9.CrossRefPubMed
15.
Crovetto M, Uauy R. Changes in processed food expenditure in the population of Metropolitan Santiago in the last twenty years. Rev Med Chil. 2012;140(3):305–12.CrossRefPubMed
16.
Crovetto MM, Uauy R, Martins AP, Moubarac JC, Monteiro C. Household availability of ready-to-consume food and drink products in Chile: impact on nutritional quality of the diet. Rev Med Chil. 2014;142(7):850–8.CrossRef
17.
Jou J, Techakehakij W. International application of sugar-sweetened beverage (SSB) taxation in obesity reduction: factors that may influence policy effectiveness in country-specific contexts. Health Policy. 2012;107(1):83–90.CrossRefPubMed
18.
19.
20.
Jensen JD, Smed S, Aarup L, Nielsen E. Effects of the Danish saturated fat tax on the demand for meat and dairy products. Public Health Nutr. 2016;19(17):3085–94.CrossRefPubMed
21.
Colchero MA, Popkin BM, Rivera JA, Ng SW. Beverage purchases from stores in Mexico under the excise tax on sugar sweetened beverages: observational study. BMJ. 2016;352:h6704.CrossRefPubMedPubMedCentral
22.
Andreyeva T, Long MW, Brownell KD. The impact of food prices on consumption: a systematic review of research on the price elasticity of demand for food. Am J Public Health. 2010;100(2):216–22.CrossRefPubMedPubMedCentral
23.
Cabrera Escobar MA, Veerman JL, Tollman SM, Bertram MY, Hofman KJ. Evidence that a tax on sugar sweetened beverages reduces the obesity rate: a meta-analysis. BMC Public Health. 2013;13:1072.CrossRefPubMedPubMedCentral
24.
Colchero MA, Salgado JC, Unar-Munguia M, Hernandez-Avila M, Rivera-Dommarco JA. Price elasticity of the demand for sugar sweetened beverages and soft drinks in Mexico. Econ Hum Biol. 2015;19:129–37.CrossRefPubMed
25.
Unar M, Colchero M, Teruel G, Rivera Dommarco JA. The effect of food and beverage prices on weight among women participating in the Mexican Family Life Survey. Cuernavaca: Instituto Nacional de Salud Pública; 2013
26.
Paraje G. The Effect of Price and Socio-Economic Level on the Consumption of Sugar-Sweetened Beverages (SSB): The Case of Ecuador. PLoS One. 2016;11(3):e0152260.CrossRefPubMedPubMedCentral
27.
28.
Deaton A, Muelbauer L. An almost ideal demand system. Am Econ Rev. 1980;70:312–26.
29.
Zhen C, Finkelstein EA, Nonnemaker J, Karns AA, Todd JE. Predicting the effects of sugar-sweetened beverage taxex on food and beverage demand in a large demand system. Amer J Agr Econ. 2014;96(1):1–25.CrossRef
30.
Moschini G. Units of measurement and the Stone Index in demand system. Am J Agric Econ. 1995;77(1):63–8.CrossRef
31.
Heien D, Roheim Wessells C. Demand systems estimation with microdata: a censored regression approach. J Bus Econ Stat. 1990;8(3):365–71.
32.
Banks J, Blundell R, Lewbel A. Quadratic Engel Curves and Consumer Demand. Rev Econ Stat. 1997;79(4):527–39.
33.
Wooldridge J. Econometric analysis of cross sextion and panel data, ed. London: C.M. Press; 2002.
34.
Ross H, Chaloupka FJ. The effect of cigarette prices on youth smoking. Health Econ. 2003;12(3):217–30.CrossRefPubMed
35.
Teruel G, Ruvalcaba L, Santana A. Escalas de equivalencia para México. Mexico City: SEDESOL Documento de investigacion 23; 2005.
36.
Poi B. Easy demand-system estimation with QUAIDS. Stata J. 2012;12(3):433–46.
37.
Deaton A. Price elasticities from suvey data: extensions and Indonesian results. J Econ. 1990;44:281–309.CrossRef
38.
Deaton A. The analysis of household surveys: a microeconometric approach to development policy. Washington: Word Bank; 1997.CrossRef
39.
Meyer S, Yu X, Abler D. Comparison of several demand systems Agricultural and Applied Economics Association 2011 Annual Meeting. 2011. p. 103736.
40.
Blecher E. Taxes on tobacco, alcohol and sugar sweetened beverages: Linkages and lessons learned. Soc Sci Med. 2015;136–137:175–9.CrossRefPubMed
41.
Brownell KD, Farley T, Willett WC, Popkin BM, Chaloupka FJ, Thompson JW, Ludwig DS. The public health and economic benefits of taxing sugar-sweetened beverages. N Engl J Med. 2009;361(16):1599–605.CrossRefPubMedPubMedCentral
42.
Fletcher J, Frisvold D, Tefft N. The effects of sotf drinks taxes on child and adolescent consumption and weight outcomes. J Public Econ. 2010;94:967–74.CrossRef
Metadata
Title
Price elasticity of the demand for soft drinks, other sugar-sweetened beverages and energy dense food in Chile
Authors
Carlos M. Guerrero-López
Mishel Unar-Munguía
M. Arantxa Colchero
Publication date
01-12-2017
Publisher
BioMed Central
Published in
BMC Public Health / Issue 1/2017
Electronic ISSN: 1471-2458
DOI
https://doi.org/10.1186/s12889-017-4098-x

Other articles of this Issue 1/2017

BMC Public Health 1/2017 Go to the issue

Research article

Strengthening capacity to research the social determinants of health in low- and middle-income countries: lessons from the INTREC programme

Research article

Occupational safety and health aspects of corporate social responsibility reporting in Japan from 2004 to 2012

Research article

Household food insecurity is associated with a higher burden of obesity and risk of dietary inadequacies among mothers in Beirut, Lebanon

Research article

Risk of chronic liver disease in post-menopausal women due to body mass index, alcohol and their interaction: a prospective nested cohort study within the United Kingdom Collaborative Trial of Ovarian Cancer Screening (UKCTOCS)

Research article

Prevalence of intestinal parasitic infection and associated risk factors among village health volunteers in rural communities of southern Thailand

Research article

Lifestyle behaviours associated with 5-year weight gain in a prospective cohort of Australian adults aged 26-36 years at baseline