Fiscal policies to fight malnutrition

This paper analyses the potential signalling effect from a tax on sugar-sweetened beverages (SSBs) that Catalonia introduced in May 2017, with a view to understand the ways in which, and the extent to which taxes discourage SSBs consumption. A questionnaire was distributed in November 2019 in two neighbourhoods from Barcelona with different mean income levels. We explored associations between variables constructed from the questionnaire and declared reduced consumption. Our goal was to disentangle the different effects from the price increase itself and from the signalling effect of the price increase on the reduction of SSBs consumption, analyzing results that account for socio-demographic characteristics, in order to provide policy recommendations. Respondents mainly declared that a higher awareness of SSBs' health risks made them curb their consumption of SSBs (98.5 percent). Only 10.6 percent of them declared that the new price was considered high enough to have discouraged their SSBs consumption. Nevertheless, the tax in Catalonia seems to have had a signalling effect through the increase in prices (100 percent pass-through of the law), and much less through the awareness of the existence of the tax. The fact that people had noticed the increase in prices is associated to a recent knowledge of SSBs' health risks, which is itself related to reduced consumption in the sample. Implementing higher and more salient SSBs taxes on the shelves, and having public campaigns making sure taxes are known among the entire population, aiming at behavioural changes among young populations, would enhance their signalling effect