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The sugar levy

Is this the way to do it?

In response to the growing problem of obesity in the UK, the government has proposed a so-called ‘sugar tax’ on soft drinks. Will this have the anticipated effect? Matthew Gobey investigates

externalities, indirect tax, elasticity

The government has aimed the sugar tax squarely at you. That is because the average young person consumes a greater proportion of their sugars from sugary drinks than anyone else. This means that in years to come (the tax starts from 2018) economists will focus their research on changes in your consumption habits and health outcomes. It is as if you are a social ‘lab rat’ of the behavioural and publicpolicy economists. The outcomes depend on how and to what degree you and your age cohort shift your consumption patterns and lifestyles following this intervention in a typically socially inefficient market. You can already see economists reaching for their computers, ready to analyse the market.

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