Price Elasticity Of Demand And The Impact Of Taxing Sugar-Sweetened Beverages In Malaysia
https://doi.org/10.37268/mjphm/vol.21/no.1/art.794
- Author:
Norashidah Mohamed Nor
1
;
Wency Bui Kher Thinng
2
;
J. Lennert Veerman
3
;
Nazli Suhardi Ibrahim
4
;
Fatimah Zurina Mohamad
4
;
Saifuzzaman Ibrahim
1
Author Information
1. School of Business and Economics, Universiti Putra Malaysia, 43400, UPM, Serdang, Selangor, Malaysia.
2. Department of Economics and Corporate Administration, Faculty of Accountancy, Finance and Business, Tunku Abdul Rahman University College, Jalan Genting Kelang, Setapak, 53300 Kuala Lumpur, Malaysia
3. School of Medicine, Griffith University Gold Coast, Griffith University Qld 4222, Australia
4. Nutrition Division, Ministry of Health Malaysia, Complex E, Federal Government Administration Center, 62590, Putra Jaya, Malaysia
- Publication Type:Journal Article
- Keywords:
Sugar-sweetened beverages, price elasticity of demand, excise tax, Malaysian government, excise revenue
- From:Malaysian Journal of Public Health Medicine
2021;21(1):223-229
- CountryMalaysia
- Language:English
-
Abstract:
The Malaysian government implemented an excise tax of MYR 0.40 per L on sugar-sweetened beverages in July 2019. Excise tax is imposed on sweetened drinks containing more than 5 g of sugar per 100 ml, flavoured Ultra High Temperature milk-based drinks, and fruit juices with more than 7 g and 12 g of sugar per 100 ml, respectively. We analysed the impact of excise tax on the consumption of SSBs by developing a demand model for SSBs to estimate the elasticity of demand using a two-way fixed-effect model. The tax increased the price of 1 L SSBs by 8.33%, and we estimated it to decrease the consumption of SSBs by 9.25%. The estimated own-price elasticity of demand for SSBs was −1.11 (95% CI: −1.97 to −0.25). Price of SSB is a determinant for SSB demand, but income or the price of milk are not. The estimated excise revenue calculated was MYR 357.61 million. However, industry responses via product reformulation and pass-through rates could reduce revenue and enhance or reduce health impacts.
- Full text:22.2021my0590.pdf
