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A Sugar-Sweetened Beverage Excise Tax in California: Projected Benefits for Population Obesity and Health Equity

This study evaluates the cost-effectiveness of a hypothetical 2-cent-per-ounce excise tax in California (CA) and implications for population health and health equity.

Lee MM, Barrett JL, Kenney EL, Gouck J, Whetstone L, McCulloch SM, Cradock AL, Long MW, Ward ZJ, Rohrer B, Williams DR, Gortmaker SL. A Sugar-Sweetened Beverage Excise Tax in California: Projected Benefits for Population Obesity and Health Equity. Am J Prev Med. 2024 Jan;66(1):94-103. doi: 10.1016/j.amepre.2023.08.004. Epub 2023 Aug 6. PubMed PMID: 37553037;

Abstract

Introduction

Amid the successes of local sugar-sweetened beverage (SSB) taxes, interest in state-wide policies has grown. This study evaluated the cost-effectiveness of a hypothetical 2-cent-per-ounce excise tax in California (CA) and implications for population health and health equity.

Methods

Using the CHOICES microsimulation model, tax impacts on health, health equity, and cost-effectiveness over ten years in CA were projected, both overall and stratified by race/ethnicity and income. Expanding upon prior models, differences in the effect of SSB intake on weight by BMI category were incorporated. Costing was performed in 2020, and analyses were conducted in 2021-2022.

Results

The tax is projected to save $4.55b in healthcare costs, prevent 266,000 obesity cases in 2032, and gain 114,000 QALYs. Cost-effectiveness metrics, including the cost/QALY gained, were cost-saving. Spending on SSBs was projected to decrease by $33/adult and by $26/child in the first year overall. Reductions in obesity prevalence for Black and Hispanic Californians were 1.8 times larger compared to White Californians, and reductions for adults with lowest incomes (<130%FPL) were 1.4 times the reduction among those with highest incomes (>350%FPL). The tax is projected to save $112 in obesity-related healthcare costs per $1 invested.

Conclusions

A state-wide SSB tax in California would be cost saving and lead to reductions in obesity and improved SSB-related health equity, and lead to overall improvements in population health. The policy would generate more than $1.6 billion in state tax revenue annually that can also be used to improve health equity.


Funding

This work was supported by The JPB Foundation (Grant No. 1085), the National Institutes of Health (Grant No. R01HL146625), the Centers for Disease Control and Prevention (CDC) (Grant No. U48DP006376). This work is solely the responsibility of the authors and does not represent official views of the CDC or other agencies. The findings and conclusions in this article are those of the author(s) and do not necessarily represent the views or opinions of the California Department of Public Health or the California Health and Human Services Agency. The sponsors had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.