Pricing and consumption behaviour

A new study published in the American Journal of Public Health finds that sales of sugary fizzy drinks fell by 26% when there was a 35% rise in their price.

The researchers also conducted a 4 week educational campaign telling people about the health benefits of reducing soft drink consumption. This had no effect.

However a combination of price rise and education led to a further 18% reduction in soft drink consumption. Sales of diet drinks and coffee rose. This is interesting in view of discussions of carbon pricing and its role in changing consumption practices.

Reference and abstract: Block JP, Chandra A, McManus K D, Willett W C. (2010). Point-of-Purchase Price and Education Intervention to Reduce Consumption of Sugary Soft Drinks AJPH 10.2105/AJPH.2009.175687. The authors investigated whether a price increase on regular (sugary) soft drinks and an educational intervention would reduce their sales.

Methods: They implemented a five phase intervention at the Brigham and Women's Hospital cafeteria in Boston, Massachusetts. After posting existing prices of regular and diet soft drinks and water during baseline, they imposed several interventions in series: a price increase of 35% on regular soft drinks, a reversion to baseline prices (washout), an educational campaign, and a combination price and educational period. They collected data from a comparison site, Beth Israel Deaconess Hospital, also in Boston, for the final three phases.

Results: Sales of regular soft drinks declined by 26% during the price increase phase. This reduction in sales persisted throughout the study period, with an additional decline of 18% during the combination phase compared with the washout period. Education had no independent effect on sales. Analysis of the comparison site showed no change in regular soft drink sales during the study period.

Conclusions: A price increase may be an effective policy mechanism to decrease sales of regular soda. Further multisite studies in varied populations are warranted to confirm these results.