Revenue Calculator - More information

Help Using the Calculator

For general assistance in using the calculator or estimating tax revenue, contact Healthy Food America at info@HFAmerica.org. For technical questions on how the tax calculator works, contact Tatiana Andreyeva at tatiana.andreyeva@uconn.edu.

Development of the Calculator

The calculator was developed by Tatiana Andreyeva, the Rudd Center’s Director of Economic Initiatives and Associate Professor of Agricultural and Resource Economics at the University of Connecticut, in collaboration with Frank J. Chaloupka, Professor of Economics, University of Illinois at Chicago and Lisa Powell, Distinguished Professor and Director of Health Policy and Administration, and Director of the Illinois Prevention Research Center at the University of Illinois at Chicago.

The project to update the calculator was a collaborative effort by the UConn Rudd Center and Healthy Food America.

Data Sources

The calculator uses multiple data sources to estimate revenues. Data for sales of beverages come from proprietary industry data from the Beverage Marketing Corporation (BMC) for 2015 and projections for 2020. Sales data are adjusted for each state/city based on its socio-demographic composition (age, race/ethnicity and education) using National Health and Nutrition Examination Survey (NHANES) 2013-2014 and US Census data. Retail prices in 2017 dollars for sodas, fruit drinks, sports drinks, energy drinks and enhanced water are based on the data from the Bridging the Gap Community Obesity Measures Project (BTG-COMP). The BTG-COMP SSB price estimates are computed based on data drawn from food store and fast food audits in 2010, 2011, and 2012 in a national sample of communities. Ready-to-drink tea and coffee prices are based on the BMC 2015 data, assuming a 100% mark-up for retail prices. Importantly, average beverage prices are constant across states and cities.

Click here for a more detailed description of the methods used for developing the calculator.

Important Local Adjustments

Revenue projections for smaller local markets (e.g., cities) need to be considered in light of the assumptions and data used in developing this calculator as a generic model. Analysts working on local revenue estimates are encouraged to consider the following factors, which are outside the scope of this calculator but could be important in smaller markets:

  1. There is no adjustment for tourism consumption. We use the residential population of states and cities and per capita sales to calculate total beverage sales.
  2. We use national prices, which could be significantly lower or higher than local prices in certain markets.
  3. It is important to consider the presence of food retailers (especially large stores) outside of but in close proximity to the taxing jurisdiction. Some shoppers might seek sugary drinks outside the taxing jurisdiction to avoid the tax, especially in smaller taxing jurisdictions, resulting in lower revenues. However, empiric evidence from Berkeley thus far suggests such cross-border purchasing is quite limited.

References

U.S. Census Bureau, 2011-2015 American Community Survey 5-Year Estimates. Demographic and Housing Estimates of the Resident Population. Educational Attainment of the Resident Population.

U.S. Census Bureau, 2010 Census and July 1, 2015 Population Projections. U.S. Census Bureau, Population Division.

Proprietary data from the Beverage Marketing Corporation. New York, NY: Beverage Marketing Corporation of New York, 850 Third Avenue, New York, New York 10022.

Bureau of Labor Statistics; CPI - All urban consumers US city average, seasonally-adjusted estimates. Carbonated beverages and juices and non-carbonated beverages.

Powell LM, Chriqui JF, Khan T, Wada R, Chaloupka FJ. Assessing the potential effectiveness of food and beverage taxes and subsidies for improving public health: a systematic review of prices, demand and body weight outcomes. Obes Rev. 2013;14(2):110-128.

Powell LM, Isgor Z, Rimkus L, and Chaloupka FJ. Sugar-Sweetened Beverage Prices: Estimates from a National Sample of Food Outlets. Chicago, IL: Bridging the Gap Program, Health Policy Center, Institute for Health Research and Policy, University of Illinois at Chicago, 2014.  www.bridgingthegapresearch.org