Sugary Goods: A Case Study

Sugar is a good ingredient for cooking, however, sugary goods can bring a lot of negative influences to human body such as obesity, so in this essay, I would like to introduce some knowledge about negative externalities, government measures. The effects of excessive consumption of sugary goods. Analyzing and evaluating the effectiveness of the imposition of tax and compare it to alternative solutions.
Externality is a kind of market failure that all allocation of goods and services is not efficient. It can be divided into two parts, which are positive externality and negative externality. There are also three measures to remedy negative externalities. Externalities is effects of activities on outside third parties, which is also called “Spillover

Research published in the British Medical Journal has found that the imposition of 10% tax on sugar-sweetened drinks in Mexico resulted in a 12% reduction in sales. From the success of soda tax in Mexico, we can see that tax is an effective method to reduce consumption. Although some beverage companies still use promotion and marketing strategies to counter the tax. For example, big companies start to develop new market in low or middle income classes. On average, consumers chose to cut back more and more as the year wore on. The researchers say: That group drank 9 percent fewer sugary beverages on average in 2014 and 17 percent fewer by the end of the year, compared with pretax trends. (Mexico's Sugary Drink Tax Makes a Dent in Consumption, 2015) Not only in Mexico, but also in many other countries, advocates say that soda taxes are an effective measure for improving public health. For example, in America. Actually, obesity is an extremely serious problem faced by America. Two out of three adults and one out of three children in the United States are overweight or obese. According to the research, sugary drinks are major contributor to obesity. A typical 20-ounce soda contains 15 to 18 teaspoons of sugar and upwards of 240 calories. A 64-ounce fountain cola drink could have up to 700 calories. (Ogden CL, Carroll MD, Kit BK, Flegal KM, 2010) After seeing the successful results of the imposition of sugary tax in Mexico. Harold Goldstein, executive director of the California Center for Public Health Advocacy, said in a statement, "It is time for federal, state and local policymakers to take real action to curb America's rising tide of diabetes and obesity, a soda tax is a critical step. Mexico has done it for their residents. So can