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The Effectiveness of Taxes in Decreasing Candy Purchases

The Effectiveness of Taxes in Decreasing Candy Purchases

Friday, October 8th, 2019 at 1:00 pm
Byrd Center For Legislative Studies Auditorium

We use candy purchase data at the household level to analyze changes in candy consumption due to Colorado’s candy tax. Colorado is one of the many states that exempts candy containing flour from their candy tax. To do this, we construct a dataset of monthly household taxed and tax-exempt candy purchases for the years 2009 and 2010 for the Denver, CO and Omaha, NE metros. Difference-in-differences estimates imply that Colorado’s candy tax led to a decrease in taxed candy purchases of at least 11.2%, which would translate into a reduction of household bodyweight of at least one pound. Conversely, we find no effect on the purchase of tax-exempt candy.

Kyle Hoy is an Assistant Professor of Economics at Shepherd University. He received his PhD in Agricultural, Environmental and Regional Economics from Penn State and his BA in Economics from Lebanon Valley College. His research interests primarily lie in the areas of energy and environmental economics and policy analysis, with current research projects focusing on the shale boom.