Brief: SSB Excise Tax in Alaska

This model-based analysis evaluated the impact of a state excise tax on sugary drinks based on either solely the size of the beverage (volume tax) or both beverage size and sugar content (graduated tax). The CHOICES microsimulation model for Alaska was used to calculate the costs and effectiveness of a volume or graduated sugary drink tax over 10 years (2015–25). The model used data from the U.S. Census, American Community Survey, Alaska Behavioral Risk Factor Surveillance System, NHANES, National Survey of Children’s Health, the Medical Expenditure Panel Survey, and multiple national longitudinal studies.

The results showed that the sugary drink excise tax based on a volume tax structure of $0.03/ounce was predicted to prevent thousands of cases of childhood and adult obesity, prevent new cases of diabetes, increase healthy life years and avoid more in future health care costs than it costs to implement, with a lower impact for a graduated tax structure. For every $1 invested to implement the tax, $19.30 in health care costs would be averted, amounting to $43.6 million saved over the ten-year period. The analysis also considered the impact on diabetes, dental decay, and equity.

Rising rates of obesity represent one of the greatest public health threats facing the United States. Obesity has been linked to excess consumption of sugary drinks. Federal, state, and local governments have considered implementing excise taxes on sugary drinks to reduce consumption, reduce obesity, and provide revenue.

This brief was developed by the CHOICES Project at the Harvard T.H. Chan School of Public Health. Funded by the JPB Foundation and Healthy Food America. Results are those of the authors and not the funders. The information in this brief is intended to provide educational information on the cost effectiveness of sugary drink taxes.