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 Food Policy 71 (2017) 86–100

Contents lists available at ScienceDirect

Food Policy
journal homepage: www.elsevier.com/locate/foodpol

Designing a tax to discourage unhealthy food and beverage purchases: The MARK
case of Chile
⁎
Juan Carlos Caroa,b, Shu Wen Ngc, Lindsey Smith Tailliec, Barry M. Popkinc,
a
National Institute of Nutrition and Food Technology (INTA), University of Chile, Santiago, Chile
b
Department of Health Policy and Management, School of Public Health, University of North Carolina, United States
c
Carolina Population Center and Department of Nutrition, School of Public Health, University of North Carolina, United States

A R T I C L E I N F O A B S T R A C T

Keywords: The global shift towards diets high in sugar-sweetened beverages (SSBs) and energy dense ultra-processed foods
Price elasticity is linked to higher prevalence of obesity, diabetes and most other non-communicable diseases (NCDs), causing
Food tax options significant costs to societies and individuals. Chile has the highest SSB consumption in the world, very high junk
Junk food tax food intake and very rapid increases in these poor components of the diet plus obesity prevalence. This study’s
SSB tax
purpose is to compare the effect of different tax policies for SSBs and ultra-processed foods on nutrient avail-
Nutrient tradeoffs
ability, utilizing price-elasticities, which are estimated from a Quadratic Almost Ideal Demand System model,
Almost ideal demand system
using the 2011–2012 Income and Expenditure survey from Chile. We take into account the high proportion of
JEL classification:
households not purchasing various food and beverage groups (censored nature of data) and endogeneity on total
D12
expenditures. The food groups considered were: sweets and desserts; salty snacks and chips; meat products and
H20
H31 fats; fruits, vegetables and seafood; grain-based staples; ready-to-drink SSB; SSB from concentrate; plain water,
I12 coffee and tea; and milk, which together represent 90% of food expenditures. The simulated taxes were: (1) 18%
price tax on all foods and beverages exceeding thresholds on sodium, saturated fat, and added sugar and for
which marketing is restricted (based on a Chilean law, effective June 16, 2016); (2) 40% tax on SSBs (22% above
the current tax level); and (3) a 1 Chilean peso (0.2 US cents) per gram of sugar tax on products with added
sugar. Unhealthy beverages and foods are price-elastic (−1.95 for salty snacks and chips, −1.30 for ready-to-
drink SSBs, and −1.27 for SSBs from concentrate), meaning that the change in consumption is proportionally
larger with respect to a change in price. Results are robust to different model specification, and consistent among
different socioeconomic sub-populations. Overall, the tax on foods and beverages high in fat, salt and sugar is
associated with the largest reduction in household purchases of sodium, added sugar, saturated fat and calorie
purchases. Chile is unique in currently having instituted a small current SSB tax as well as marketing controls
and front-of-package labelling of unhealthy foods and beverages. The design of a more comprehensive tax to
enhance the overall effect of these policies on healthier diets is a next critical step. This study shows that a tax on
the same foods and beverages already delineated as unhealthy by the marketing controls and front-of-pack
labelling should promote a healthier diet.

1. Introduction
Across the globe obesity has increased rapidly, and is linked with
many non-communicable diseases (NCDs), imposing significant direct
and indirect costs on both individuals and societies (Jaacks et al., 2015;
Kwan et al., 2016; Malik et al., 2013; Murray et al., 2012; Withrow and
Alter, 2011). Chile is one of the countries with the most rapid increase
in income and processed food supply and now ranks as the Latin-
American country with the second highest adult obesity prevalence,
after Mexico (OECD, 2014). According to the Chilean Ministry of Health
estimates, overweight and obesity reached 64.5% among men and
64.3% in women in 2010 (Ministerio de Salud, 2011). Among 6 year
old children, obesity prevalence was 25.2% in 2014 (JUNAEB, 2014).
While exact evidence on the role of sugar sweetened beverages
(SSBs) and energy dense ultra-processed foods on health does not exist
for Chile, it is clear from consumption surveys and other research that
these represent a major cause of the health problems among Chileans
(Corvalán et al., 2013; Camila Corvalán et al., 2010, 2009). These
findings are consistent with the global consensus that links SSBs and
energy dense ultra-processed foods as leading risk factors associated

⁎
Corresponding author at: Carolina Population Center, 206 West Franklin St., Rm. 208, Chapel Hill, NC 27516, United States.
E-mail addresses: Bjuancaro@live.unc.edu (J.C. Caro), shuwen@unc.edu (S.W. Ng), lindsey.smith@unc.edu (L.S. Taillie), popkin@unc.edu (B.M. Popkin).

http://dx.doi.org/10.1016/j.foodpol.2017.08.001
Received 6 July 2016; Received in revised form 12 July 2017; Accepted 2 August 2017
0306-9192/ © 2017 Elsevier Ltd. All rights reserved.
J.C. Caro et al. Food Policy 71 (2017) 86–100

with obesity and overweight (Malik et al., 2010; Morenga et al., 2013;
Tavares et al., 2012). In 2014, Chile led total SSBs consumption per
capita per day worldwide, with the highest growth rate in the
2009–2014 period (Popkin and Hawkes, 2016). SSBs expenditure in
Chilean households rose 151% between 1987 and 2007, to 289 ml per
capita per day (M. M. Crovetto and Uauy, 2014). At the same time,
unhealthy foods high in sodium, saturated fats, sugar and refined car-
bohydrates (often termed ‘junk’ food or ultra-processed foods) re-
presented 55.4% of total household food expenditures (Crovetto et al.,
2014).
Several policies have been recommended and/or implemented to
reduce SSBs and ‘junk’ food consumption in different countries and
contexts, mainly focusing on front-of-package (FOP) food profiling and
labelling, marketing restrictions, taxation, and removal of these foods
and beverages from public institutions (Anand et al., 2015; Hawkes,
2007; Jou and Techakehakij, 2012; Sacks et al., 2011; Thow et al.,
2014). Mexico, France, many of the Western Pacific Islands, Hungary,
and Demark are among countries that have recently passed taxation
laws to reduce consumption of these beverages and foods (Batis et al.,
2016; Biro, 2015; Colchero et al., 2016; Smed et al., 2016; Snowdon
and Thow, 2013). In Chile, starting in September 2014, the tax rate for
SSBs with sugar content higher than 15 g per 240 ml or equivalent
and 2012, by the Chilean National Institute of Statistics (Instituto
Nacional de Estadística de Chile, 2013). The EPS contains information
regarding quantities and expenditure on all items used to construct the
Consumer Price Index weights, and also reports socioeconomic and
demographic information of the households (used to define poverty
lines, among other applications). The EPS has a probabilistic, stratified,
two stage sample design. The total sample size is 10,527 households.
There are two representative zones identified in the survey: main ca-
pital and rest of the country.
2.2. Quadratic almost ideal demand system (QUAIDS)
We seek to compare counterfactual policy changes on household
purchases. Thus, it is relevant to consider a utility-based structural
model, which models individual behavior in response to prices. To do
this, we estimated the quadratic extension of the Almost Ideal Demand
System model (Deaton and Muellbauer, 1980), introduced by (Banks
et al., 1997), QUAIDS for short, which allows more flexibility over the
income-expenditure (Engel) curves. The model in its budget share form
is defined as follows:
2
m ⎞⎞ λi ⎛ ⎛ m ⎞ ⎞
wi = αi + ∑ ρk z k + ∑ γij lnpj + βi ⎜⎛ln ⎛⎜ ⎟⎟ + ⎜ln ⎜ ⎟⎟

portion rose from 13% to 18%, and was reduced to 10% for other k∈K j∈I ⎝ ⎝ a (p ) ⎠ ⎠ b (p) ⎝ ⎝ a (p) ⎠ ⎠
beverages (Servicio de Impuestos Internos, 2014). In the same line, Law
+ μi (1)
20.606, effective June 2016, tightened marketing regulations, FOP la-
belling and sale restrictions in school settings for energy-dense foods With the nonlinear price aggregators:
and beverages, as well as those high in fat, salt and sugar (Biblioteca del 1
Congreso Nacional de Chile, 2015). lna (p) = α 0 + ∑ αj lnpj +
2
∑∑ γlj lnpl lnpj
The focus of most of these tax initiatives has either been on SSBs, j∈I l∈I j∈I (2)
‘junk' foods or foods high in unhealthy saturated fats with limited sci- β
b (p) = ∏ pj j ,
entific evidence of the effect this policies have on consumption, with
j∈I (3)
the exceptions of Mexico (Colchero et al., 2016), Hungary (Biro, 2015)
and Denmark (Jensen et al., 2015). Work by others have estimated the where wi , pi and m are budget share and price of the food item group i ,
potential for different tax scenarios, including taxation on SSBs alone, and the total food expenditure per household, respectively. I represents
combined with ‘junk’ foods, or on sugar content, to understand which of the set of all food groups. z k is a set of sociodemographic variables
these frameworks might discourage unhealthy nutrient intakes introduced to allow household heterogeneity. Following earlier work
(Nnoaham et al., 2009; Smed et al., 2007), but this has yet to be done (Deaton and Muellbauer, 1980), we impose constraints of homogeneity
for Chile or other rapid growth countries. Price-elasticities estimated of degree zero on prices and income (if prices and income change in the
from demand system models are a key element to measure the potential same ratio, demand is unaffected) and symmetry (substitution or
impact of alternative fiscal policies on expenditure for specific food complementary effects between goods are symmetrical in direction and
groups. Although other factors such as households’ response to prices magnitude) within the demand system of foods and beverages. In par-
by stockpiling or adjusting quality of purchases, and industry marketing ticular these constraints are:
response also need to be considered when assessing counterfactuals for
policy simulation, price-elasticities constitute a useful benchmark to
∑ γij = 0 ; ∑ γij = 0; γij = γji
i∈I j∈J (4)
analyze fiscal policy outcomes.
The objective of this study is twofold. First, it aims to jointly esti- When controlling for potential censored nature of the data (as fur-
mate own- and cross- price-elasticities of ‘junk’ foods and SSBs for ther explained below), the non-linear system of equations is no longer
Chilean urban households. Secondly, we assess the impact of a series of bound to add up to unity. However, adding up and negativity constrains
alternative tax schemes on expenditure and nutrient availability. Our are imposed within the second stage. Therefore, we do not impose the
paper expands the existing literature regarding quadratic almost ideal restriction that ∑i ∈ I wi = 1.
demand system models (QUAIDS) by accounting for censoring as well Household budget and expenditure surveys can include zero ex-
as endogeneity in expenditures, and its applications to ‘junk’ foods and penditure in certain food groups due to a number of reasons such as
SSBs taxation. Sensitivity analyses were conducted based on other non-availability, non-preference, non-affordability or infrequent pur-
model specifications. Results of this study contribute to the discussion chases. Because these reported zeros are likely selective, simply in-
on the current tax framework and the impact of future changes to re- cluding them as zeros within the model would introduce bias. Thus,
duce the prevalence of overweight and obesity in Chile. several approaches to solve this issue have been developed. In parti-
cular, (Shonkwiler and Yen, 1999) propose a two-step process ac-
2. Materials and methods cording to a censored model. First, a probit model is estimated and used
to predict the cumulative distribution (Φ ) and probability density
2.1. Data functions (ϕ ) for each household. Then, this information is used in the
second step to modify Eq. (1) as follows:
For this study we used the cross-sectional VII Income and
wi∗ = Φî wi + δi ϕi ̂ (5)
Expenditure Survey (EPS, Spanish acronym) collected between 2011

87
J.C. Caro et al.
Also, often prices and/or expenditure might be endogenous,
meaning that expenditure shares and the explanatory variables might
be jointly influenced by other factors. We account for potential en-
dogeneity in expenditure using a two-step method as proposed by
(Banks et al., 1997). This procedure involves estimating a model for the
total expenditure in each household, and then incorporating the re-
siduals of the model as an additional control variable within z in Eq.
(1). Given the expected non-linearity of the error term in each equation
of the system, we bootstrapped the standard errors for the estimated
parameters, with 500 repetitions.
Unfortunately, we were unable to correct for potential endogeneity
in prices, which may exist since these are calculated as the ratio of
expenditure over quantity among household who chose to purchase
these products (Deaton, 1988). Because the EPS only includes two zones
it is not possible to create spatially varied prices across households in
the data to address this potential endogeneity in prices.
Thus, we estimate the QUAIDS model controlling for censored data
and potential endogeneity in expenditure as our base model, using
demographic shifts to allow for household heterogeneity. In particular,
we used the age, gender and education of the head of household, as well
as household location (zone) and size of the household. Due to the
limited sample size, there is a trade-off between the number of addi-
tional sociodemographic controls to include and accounting for en-
dogenous and censored nature of the data.
For sensitivity analysis, we tested two other models. One does not
account for censoring or potential endogeneity in expenditure. Another
accounts for censoring but not potential endogeneity in expenditure.
We compare the estimates from these two models with our base model
to show how estimates might be biased otherwise. Additionally, the
base model was estimated for two sub-samples: low income households
(first two income quintiles) and middle-high income (highest three in-
come quintiles). Unfortunately, the analytic sample was too small to
allow us to separate into more distinct/less heterogeneous households
groups by income.
2.3. Simulating tax policy scenarios
After estimating the parameters, the price-elasticities were com-
puted for the median values of the variables (due to the high skewness
of the data), and then were used to simulate three different policy (tax)
scenarios. These three scenarios are based on current taxation and
marketing concerns, and the WHO push to reduce added sugar in our
diets (World Health Organization, 2015). The three policy scenarios
are: (1) expanding the current 18% tax on SSBs to include foods and
beverages high in fat, sodium and sugar (using the criteria based on
Law 20.606, that regulates marketing and labelling for energy-dense
foods and beverages as well as those high in saturated fat, sodium, and
added sugar); (2) increasing the current 18% tax on SSBs to 40%, which
represents an 18.6% (22 per cent point) increase1; and (3) a 1 Chilean
peso (0.002 USD) per gram of sugar tax on products with added sugar,
which is consistent with the proposed tax rate in South Africa (National
Treasury Republic of South Africa, 2016).
All models were estimated using STATA v.14.1. To estimate the
QUAIDS two-step restricted and censoring adjusted base model, we
used a modified version of the –nlsur- model, provided by (Poi, 2008),
while for the unrestricted model, the –aidsills- command was used
(Lecocq and Robin, 2015).
1 milk), without further specificity.
At the time of the 2011–12 EPS data, there was a 13% tax on all SSBs and no tax on
any foods. In 2014 the tax rate on SSBs increased to 18% for beverages with more than
15 g of sugar per 240 ml or equivalent portion, and 10% on all other SSBs but did not add
taxes to any foods. Therefore for the purposes of the analysis, the current 18% tax rate for
SSBs is modeled as a 4.4% increase, and the proposed additional 18% tax rate for foods
high in fat, salt and sugar is modeled as an 18% increase (Policy 1), while the proposed
increase for SSBs to 40% is modeled as a 23.9% increase (Policy 2).
88
Food Policy 71 (2017) 86–100
2.4. Variables
For this study, 154 food and beverage items2 in the survey were
sorted into nine mutually exclusive groups of food and beverages, in
order to observe potential complementarities and substitutions: (1)
sweets and desserts; (2) salty snacks and chips; (3) meat products and
fats; (4) fruits, vegetables and seafood; (5) grain-based staples; (6)
ready-to-drink (RTD) SSBs; (7) SSB from concentrate; (8) plain water,
coffee and tea; and (9) milk3. Groups (1) and (2) are considered ‘junk’
foods high in fat, sodium or sugar; groups (6) and (7) are SSBs; while
groups (3), (4), (5), (8) and (9) represent healthier foods and beverages.
Food expenditure shares for each group were calculated adding
expenditures within each group and then dividing it by total ex-
penditure of the nine categories. Total expenditure among the selected
food basket accounts, on average, for over ninety percent of total food
expenditure, and it only excludes food items such as condiments and
food away home. As proxy to prices, unit values were calculated as the
ratio of expenditure over quantity for each food group. Adjustments
were made for items that are consumed in a reconstituted form from
powder or concentrate4 (Crovetto and Uauy, 2014). When expenditures
were reported as zero, the missing unit value for that household was
replaced by the average of households within the same zone and in-
come level. To avoid extreme values (outliers) to affect calculations,
when unit values exceeded ± 2.5 standard deviation for its own zone
and income level, that value was replaced by ± 2.5 standard deviation.
To account for household composition, adult equivalent units (EA)
calculations were done as follows: for children under 5 years old equals
to 0.77 EA; children from 6 through 12 years old equals to 0.80 EA, and
adolescents from 13 to 18 years old accounts for 0.88 EA. This is
standardized approach refined by the UN-FAO and the WHO (Food and
Agriculture Organization of the United Nations., United Nations
University., & World Health Organization., 2004).
To understand the impact of price changes on nutrient availability,
nutritional information (calories, carbohydrates, sugar, sodium, pro-
tein, total fat and saturated fat) was linked to each item within each
food and beverage group in the survey. When an item was identified in
enough detail (e.g. bananas), the nutritional information was matched
directly. For items where there is more variability (e.g. bread), we use
the geometric mean of a set of different specific food and beverage
products available, which matched each item, respectively. The nutri-
tional information for each product was obtained from nutritional food
panel sources relevant to the Chilean diet (U.S. Department of
Agriculture, 2015; Universidad de Chile, 1992). In particular, the nu-
trient data for Chilean processed foods and beverages comes from a
survey of 6000 packaged and processed foods and beverages with bar
codes collected in 2015 (REDCap system of INTA, 2015). Then, food
group level nutritional values were calculated as a weighted average of
the nutrients per 100 g, based on average purchases of all food products
within each food group. All results are expressed in absolute value, and
also as a percentage of the median of nutrient availability per equiva-
lent adult per day. Appendix Table A1 provides some statistics on the
average nutrient content per 100 g at the food group level. Appendix
Table A2 describes the upper nutrient limits and implementation dates
for the marketing control and FOP labelling scheme. We used the June
2019 nutrient criteria as the basis for items to be taxed under Policy 1.
For Policy 3, based on the average sugar content from Appendix
Table 6, and the median unit price (converted to per 100 g) from
2
Each item represents a single food or beverage in a broad sense (e.g. yogurt, bread,
3
The group classification was defined in relation to the expected nutritional outcome,
restricting to a minimum size to obtain consistent estimates. This procedure required to
combine some food groups with similar consumption patterns.
4
Concentrated volume was multiplied using the ratio to reconstituted product for each
beverage (e.g., teas, juices, coffee), using the manufacturer instructions in each case
(based on a sample of packages for each product).
J.C. Caro et al. Food Policy 71 (2017) 86–100

Table 1
Household sociodemographics (N = 10,462 households).

Low income (N = 4,697) Mid-High income (N = 5,786) Total sample

Variable mean 95% CI mean 95% CI mean 95% CI

Gender of household head (0 = female) 0.51 0.49 0.52 0.66 0.65 0.67 0.59 0.58 0.60
Age of household head (years) 51.5 51.0 52.0 51.3 50.9 51.6 51.4 51.1 51.7
Education of household head (years) 9.7 9.6 9.8 12.9 12.8 13.0 11.4 11.4 11.5
Household size (equivalent adults) 2.8 2.7 2.8 3.4 3.4 3.5 3.2 3.1 3.2
Region (0 = main capital) 0.43 0.41 0.44 0.40 0.39 0.41 0.41 0.40 0.42

Source: Chilean Income and Expenditure Survey (EPS) 2011–2012 (Instituto Nacional de Estadística de Chile, 2013).
Note: Bold denotes mean; Low income defined as households in the first two quintiles of income distribution after accounting for household size; High income defined as households in
quintiles 3–5 of the income distribution after accounting for household size.

Table 2
Expenditure statistics on EPF survey: 10,462 households.

Item Median expenditure Median quantity purchased per capita Households with expenditure > 0 Median quantity purchased per capita
share (all households) (%) (households with exp. > 0)

Sweets and desserts 0.15 74.6 92.5% 105.1

Salty snacks and chips 0.03 3.4 33.8% 5.7
Meat products and fats 0.33 143.8 97.6% 175.1
F+V, fish and seafood 0.19 256.5 95.1% 321.4
Grain-based staples 0.21 269.7 99.1% 310.6
SSB, ready to drink 0.10 164.3 85.2% 228.1
SSB, concentrate 0.02 147.3 35.4% 219.4
Water, coffee and tea 0.03 272.8 49.1% 555.6
Milk 0.06 60.3 59.5% 98.2
Item mean median 95% CI

Sweets and desserts 4274.0 3627.5 4220.4 4327.6

Salty snacks and chips 8771.9 8102.6 8716.0 8827.7
Meat products and fats 3487.9 3324.7 3467.9 3507.9
F+V, fish and seafood 1285.6 1116.6 1272.7 1298.6
Grain-based staples 1016.6 944.6 1009.5 1023.7
SSB, ready to drink 791.3 690.4 782.4 800.1
SSB, concentrate 142.7 141.3 142.3 143.0
Water, coffee and tea 425.7 235.2 413.9 437.5
Milk 752.6 709.8 747.7 757.5

Source: Chilean Income and Expenditure Survey (EPS) 2011–2012 (Instituto Nacional de Estadística de Chile, 2013).
Note: F+V: fruits and vegetables; SSB = Sugar sweetened beverages; CLP = Chilean peso; USD = US Dollar

Table 2, we applied a price increase of 11% for sweets and desserts,
13% for RTD SSBs and 23.4% for SSBs from concentrate.
3. Results
Table 1 shows socio-demographic descriptive statistics. On average,
low income households are more likely to have female heads of
households with fewer years of education. Also, low income households
are smaller (based on equivalent adults), meaning that there are less
adults and/or more children compared to mid-high income households
with the same number of people. Table 2 reports the median ex-
penditure per food group across the full sample (Appendix Table A3
shows this by the two income groups). The large proportions of
households without expenditures in selected food and beverage groups
is highlighted the third column of Table 2. The snacks and chips, and
SSBs from concentrate groups show the lowest percentage of house-
holds reporting purchases. In contrast, more than 85% of households
report buying RTD SSBs, and 92.5% indicate purchases of sweets and
desserts. Sweets and desserts, as well as snack and chips are the groups
with higher median unit value per kilogram within the foods, while
RTD SSBs are more expensive than other beverages.
In Table 3 we show the mean unconditional price-elasticities from
the estimated QUAIDS model correcting for censoring and potential
endogeneity in expenditures. Most food groups have elastic own-price
elasticities, but the grain-based staple group, the meat products and fats
group, as well as sweets and desserts group have inelastic own-price
elasticities, while they together also represent the three highest com-
ponents of food expenditures (69% from Table 2). The own-price
elasticity of RTD SSBs is elastic (−1.30), which means that for a 10%
price increase, purchases would fall by 13% (assuming linearity). Other
unhealthy items, such as salty snacks and chips, and SSBs from con-
centrate are price elastic, but these are also the groups that account for
the lowest proportion of households reporting expenditures and smaller
expenditure shares overall. The own price elasticity for milk is very
high at −2.13. Cross price-elasticities show substitution and com-
plementarity patterns among food groups. In particular, we observe
important substitution between the price of RTD SSBs and SSBs from
concentrates and the demand for milk (p < 0.01 and p < 0.05, re-
spectively). Meanwhile, sweets and desserts appear to complement
milk.
The sensitivity analysis tests the removal of the endogeneity and
censoring assumptions. We found that in general, not correcting for
endogeneity in expenditure would result in slightly higher own price
elasticities. Not correcting for both endogenous expenditures and

89
J.C. Caro et al. Food Policy 71 (2017) 86–100

Table 3
Uncompensated elasticities from censored QUAIDS model, controlling for potential endogeneity on expenditure.

Change in price

Change in quantity Sweets and Salty snacks and Meat products F+V and Grain based SSB, ready to SSB, Water, coffee Milk
desserts chips and fats seafood staples drink concentrate and tea

Sweets and desserts −0.818*** 0.014* −0.132** −0.032 0.049 0.059 0.002 −0.009 −0.024**
0.02 0.01 0.06 0.11 0.07 0.04 0.01 0.02 0.01
Salty snacks and 0.249 −1.954*** −0.213 −0.981 −0.230 −0.515 0.099 −0.040 0.378***
chips 0.17 0.22 0.51 0.97 0.50 0.38 0.07 0.12 0.12
Meat products and −0.067*** 0.008*** −0.935*** 0.088** −0.017 −0.031 −0.004 0.009 0.001
fats 0.01 0.01 0.02 0.03 0.02 0.03 0.00 0.01 0.01
F+V and seafood −0.048* −0.001 0.067 −1.017*** −0.285*** 0.005 −0.013** 0.007 0.010
0.03 0.01 0.06 0.10 0.06 0.04 0.01 0.01 0.01
Grain based staples −0.029 0.023 0.142** 0.259* −0.673*** 0.113 0.032*** 0.023 0.122***
0.04 0.02 0.07 0.14 0.09 0.08 0.01 0.02 0.02
SSB, ready to drink 0.158 −0.059 −0.460*** −0.742** −0.343 −1.301*** −0.030* −0.026 0.020
0.10 0.05 0.16 0.36 0.27 0.28 0.02 0.05 0.04
SSB, concentrate −0.080 0.206* 0.136 0.629** 0.627*** 0.208 −1.270*** 0.059 0.193***
0.08 0.12 0.14 0.26 0.22 0.18 0.16 0.05 0.07
Water, coffee and −0.042 0.021 −0.096 −0.356 −0.428 0.097 −0.027 −1.349*** 0.018
tea 0.15 0.05 0.36 0.77 0.40 0.23 0.04 0.18 0.06
Milk −0.124*** 0.194*** −0.014 0.082 0.620*** 0.221*** 0.044** 0.033* −2.131***
0.03 0.04 0.08 0.11 0.08 0.05 0.02 0.02 0.08

Source: Chilean Income and Expenditure Survey (EPS) 2011–2012 (Instituto Nacional de Estadística de Chile, 2013).
Note: F+V = fruits and vegetables; SSB = Sugar sweetened beverages; bold denote own-price elasticities.
* p < 0.1.
** p < 0.05.
*** p < 0.01.

Fig. 1. Own-price elasticities of ‘junk’ foods and

Sweets and desserts Salty snacks SSB RTD SSB concentrate
SSBs by socioeconomic group. Source: Chilean
0 Income and Expenditure Survey (EPS) 2011–2012
(Instituto Nacional de Estadística de Chile, 2013).
Notes: Results based on censored QUAIDS model
with endogeneity corrections for expenditures.
-0.5 SSB = Sugar sweetened beverages; RTD = ready-
to-drink.

-1

-1.5

-2

-2.5
Low Income Mid-high Income

censoring also generally inflated own price elasticities of demand, with
the exception of RTD SSBs, meat products and fats, and milks. However,
in comparing the own-price elasticities across the three models, the
elasticity estimates appear relatively robust.
Appendix Tables A4 and A5 present the price elasticity estimates
from the base model for low and mid-high income households respec-
tively. We found that low income households had higher own price
elasticities of demand for SSB ready-to-drink, sweets and desserts, fruits
and vegetables, and milk. On the other hand, the price elasticity is
lower for salty snacks and chips; SSBs from concentrates and meat
products and fats. The own-price elasticity estimate for salty-snacks and
chips is not significant for low-income households, likely due to the
high censoring (only 25% of low-income households report purchasing
salty snacks and chips as shown in Appendix Table A3). The less re-
sponsiveness of low-income households to the price of SSBs from con-
centrates may be because these are cheap substitutes to RTD SSBs,
which low-income households are more likely to substitute towards
when prices of RTD SSBs rise. The own-price elasticity estimates for
meat products and fats are similar for low- and mid-high income
households. Fig. 1 illustrates the own-price elasticities by the two

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J.C. Caro et al. Food Policy 71 (2017) 86–100

Table 4
Policy scenario simulation results for change in nutrient availability.

Policy 1: 18% tax on marketing controlled foods and beverages

Nutrient per AE Sweets and Salty snacks Meat products F+V and Grain based SSB, ready to SSB, Water, Milk Total
per day desserts§ and chips§ and fats seafood staples drink§ concentrate§ coffee + tea

Calories −30.83*** −5.87*** −5.00*** −1.52* 3.46 −2.49*** −0.52 −0.001 0.69*** −42.10***
1.04 0.77 1.04 0.81 3.97 0.91 0.43 0.04 0.26 3.12
Carbohy-drates −5.50*** −0.64*** −0.01*** −0.24** 0.66 −0.62*** −0.12 −0.00 0.07*** −6.41***
(g) 0.19 0.08 0.00 0.13 0.76 0.23 0.10 0.01 0.03 0.56
Sugar (g) −4.17*** −0.02*** −0.00*** −0.10** 0.01 −0.59*** −0.12 0 0.07*** −4.93***
0.14 0.00 0.00 0.05 0.02 0.22 0.10 0.03 0.23
Sodium (mg) −11.11*** −6.63*** −5.98*** −1.07** 2.68 −0.86*** −0.40 −0.00 0.87*** −22.52***
0.38 0.88 1.24 0.58 3.08 0.32 0.33 0.12 0.33 2.89
Fats (g) −0.82*** −0.33*** −0.42*** −0.04** 0.03 0 0 0 0.02*** −1.56***
0.03 0.04 0.09 0.02 0.04 0.01 0.09
Saturated Fats −0.40*** −0.04*** −0.14*** −0.00** 0.00 0 0 0 0.01*** −0.58***
(g) 0.01 0.01 0.03 0.00 0.00 0.01 0.03
Protein (g) −0.36*** −0.07*** −0.27*** −0.07** 0.12 −0.02*** −0.02 0 0.04*** −0.65***
0.01 0.01 0.06 0.04 0.14 0.01 0.02 0.02 0.17

Policy 2: 40% SSBs

Nutrient per AE Sweets and Salty snacks Meat products F+V and Grain based SSB, ready to SSB, Water, Milk Total
per day desserts and chips and fats seafood staples drink§ concentrate§ Coffee + tea

Calories 3.18 −1.79 −3.52 −0.31 21.57* −18.96*** −5.37*** 0.03 1.80*** −3.37
2.30 1.60 2.65 1.88 11.06 4.03 1.20 0.12 0.41 9.86
Carbohy-drates 0.56 −0.19 −0.01 −0.04 4.14* −4.71*** −1.27*** 0.00 0.20*** −1.33
(g) 0.41 0.18 0.01 0.30 2.12 1.00 0.29 0.03 0.05 1.43
Sugar (g) 0.43 −0.00 −0.00 −0.02 0.11* −4.56*** −1.24*** 0 0.18*** −5.10***
0.31 0.01 0.00 0.13 0.06 0.97 0.28 0.04 0.76
Sodium (mg) 1.14 −2.03 −4.20 −0.21 16.72* −6.59*** −4.13*** 0.09 2.27*** 3.06
0.83 1.81 3.17 1.33 8.58 1.40 0.92 0.36 0.52 9.84
Fats (g) 0.08 −0.10 −0.30 −0.00 0.22* 0 0 0 0.06*** −0.03
0.06 0.09 0.23 0.05 0.12 0.01 0.29
Saturated Fats 0.04 −0.01 −0.10 −0.00 0.02* 0 0 0 0.04*** −0.00
(g) 0.03 0.01 0.08 0.01 0.01 0.01 0.08
Protein (g) 0.03 −0.02 −0.18 −0.01 0.76* −0.15 ***
−0.22 ***
0 0.12*** 0.32
0.03 0.02 0.14 0.10 0.39 0.03 0.05 0.03 0.55

Policy 3: 1 CLP (0.2 US cents) per gram of sugar

Nutrient per AE Sweets and Salty snacks Meat products F+V and Grain based SSB, ready to SSB, Water, Milk TOTAL
per day desserts§ and chips and fats seafood staples drink§ concentrate§ Coffee + tea

Calories −17.93*** −0.26 −4.93*** −1.19 10.40** −8.59** −5.01** 0.00 0.61*** −26.90***
1.30 0.71 1.37 0.96 4.73 1.68 0.74 0.05 0.23 4.12
Carbohy-drates −3.20*** −0.02 −0.01** −0.19 1.99** −2.13** −1.19** 0.00 0.06*** −4.70***
(g) 0.23 0.08 0.00 0.15 0.91 0.42 0.18 0.01 0.03 0.61
Sugar (g) −2.42*** −0.00 −0.00*** −0.08 0.05** −2.06** −1.15** 0 0.06*** −5.62***
0.18 0.00 0.00 0.06 0.03 0.40 0.17 0.02 0.37
Sodium (mg) −6.46*** −0.29 −5.8*** −0.84 8.07** −2.98** −3.85** 0.00 0.77*** −11.49***
0.47 0.80 1.63 0.68 3.67 0.58 0.57 0.15 0.29 4.16
Fats (g) −0.48*** −0.01 −0.42*** −0.03 0.11** 0 0 0 0.02*** −0.81***
0.03 0.04 0.12 0.03 0.05 0.01 0.14
Saturated Fats −0.23*** −0.00 −0.14*** −0.00 0.01** 0 0 0 0.01*** −0.35***
(g) 0.02 0.01 0.04 0.00 0.01 0.00 0.04
Protein (g) −0.21*** −0.00 −0.26*** −0.06 0.36** −0.06** −0.21** 0 0.04*** −0.41*
0.02 0.01 0.07 0.05 0.17 0.01 0.03 0.02 0.23

Note: AE = adult equivalents; F+V = fruits and vegetables; SSB = Sugar sweetened beverages.
§
Subject to tax.
* p < 0.1.
** p < 0.05.
*** p < 0.01.

income subgroups for the unhealthy food and beverage groups.
Table 4 shows how the three different tax scenarios are estimated to
affect nutrient availability because of changes in purchases estimates
from the censored QUAIDS model. All three scenarios result in mean-
ingful reductions in sugars, but only Policy 1 and 3 also result in
significant reductions in calories, sodium, saturated fats, total fats and
carbohydrates. Increasing the existing tax on SSBs to a 40% tax (Policy
2) is not estimated to illicit meaningful reductions in unhealthy nu-
trients beyond sugar. Fig. 2 presents the nutrient changes across all food
groups (Fig.2A), as well as only among the unhealthy ‘junk’ food and

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J.C. Caro et al. Food Policy 71 (2017) 86–100

A. Change on Nutrient Availability from All Food Groups

Policy 1:
18% tax on
marketing
controlled
foods &
beverages

Policy 2:
40% tax
on SSBs

Policy 3:
1 CLP per
gram of
sugar tax

-60 -40 -20 0 20 -10 -8 -6 -4 -2 0 2

B. Change on Nutrient Availability from Junk Food and SSBs

Policy 1:
18% tax on
marketing
controlled
foods &
beverages
Policy 2:
40% tax
on SSBs

Policy 3:
1 CLP per
gram of
sugar tax

-50 -40 -30 -20 -10 0 -10 -8 -6 -4 -2 0 2

sodium (mg) kcal protein(g) sat. fats (g) fats (g)
sugar (g) carbs (g)
Fig. 2. Policy Scenario simulation results on change in nutrient availability (per adult equivalent per day). Source: Chilean Income and Expenditure Survey (EPS) 2011–2012 (Instituto
Nacional de Estadística de Chile, 2013). Notes: Results based on censored QUAIDS model with endogeneity corrections for expenditures. CLP = Chilean peso; SSB = sugar sweetened
beverage. ‘Junk’ foods and SSBs include: Sweets & desserts, salty snacks & chips, ready-to-drink SSBs and SSBs from concentrates.

beverage groups (Fig.2B), which allows us to determine if the nutrient
changes are coming from foods to discourage. We see that of the three
scenarios, the 18% tax across all food and beverages high in fat, salt and
sugar (Policy 1) reduces calories, sodium, carbohydrates, saturated fats
and total fats from ‘junk’ food and SSBs the most. It also lowers sugars
by about 5 g per adult equivalent per day, which almost entirely comes
from ‘junk’ foods and SSBs.
Nutrient changes for low- and mid-high income households are found in
Appendix Tables A6 and A7, respectively. These showed consistent results
as for the overall findings. Note that because mid-high income households

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Table 5
Summary of own-price uncompensated elasticities (from demand system models).

Study Data sample Junk food own-price elasticities SSB own-price elasticities Notes

Heien and Wessells (1990) US households −2.19 to −0.05 −1.38 to −1.10 SSBs. Junk Food: Ice cream
Huang and Lin (2000)* 4,245 US households −1.01 Juices only.
Yen et al. (2003) 1.069 US households −1.03 SSBs
Pittman (2004)* 5,715 US households −1.07 to −0.86 SSBs
Chouinard et al. (2005) US households −0.80 to −0.77 Junk food: ice cream, flavored yogurt
Smith et al. (2010) US households −1.26 SSBs
Allais et al. (2010) 5,000 FR households −0.47 to −0.39 −0.99 to −0.98 Sodas only.Junk food: sugar and fat products
Zhen et al. (2011) 33,206 US households −1.06 Sodas only, low income households
Bonnet and Requillart (2011) 19,000 FR households −4.2 to 2.92 Different brands of soda drinks.
Dharmasena et al. (2011) US households −2.26 to −1.17 SSBs
Gustavsen and Rickertsen (2011) 25,023 Norway households −2.58 to −0.99 −1.73 to −0.85 SSBs. Junk Food: Candy and ice cream
Härkänen et al. (2014)* 17,000 Finish households −2.54 Junk Food: sugar and sweets
Lin et al. (2011) 22,750 US households −0.95 SSBs
Bonnet and Requillart (2012)* 19,000 FR households −4.9 to −2.37 Different brands of soda drinks.
Briggs et al. (2013) 5,263 UK households −0.81 SSB ready-to-drink
Green et al. (2013) Meta-analysis (136 studies) −0.56 to −0.74 SSBs and sweets included in one group
Sharma et al. (2014) 5,560 AUS households −0.63 Sodas only
Zhen et al. (2013) 37,786 US households −1.67 to −1.11 −1.04 Junk food: ice cream, candy, cakes, snacks
Colchero et al. (2015) 73,311 MEX households −0.98 to −1.15 −1.16 Junk food: candy and snacks
Harding and Lovenheim (2014)* 162,974 US households −0.29 to −0.27 −2.26 to −2.19 Sodas only. Junk food: candy and snacks
Paraje (2016) 39,617 Ecuadorian households −1.2 SSBs

* Not peer-reviewed.

obtain more nutrients on average than low-income households, the absolute
nutrient changes are higher among mid-high income households.
4. Discussion
This study was designed to examine the three alternate fiscal policy
(tax) scenarios using income and expenditure data for Chile. Overall
this study showed that an 18% tax on the ultra-processed junk foods
and beverages (those high in fats, salt and/or sugar as defined inChile’s
marketing and labelling regulations) is linked with the highest reduc-
tion in caloric intake and sodium and saturated fats as well as sig-
nificant reductions in added sugar, compared to other alternative po-
licies. To obtain these results, the research utilized the estimates of a
censored quadratic almost ideal demand system model that corrected
for endogeneity in expenditures for beverages and foods, from which
price-elasticities were derived and nutrient changes under different tax
scenarios were simulated. We found own-price elasticities of −1.30 for
RTD SSBs, −1.27 for SSBs from concentrate, −0.82 for sweets and
desserts, and −1.95 for salty snacks and chips.
Our results are comparable with other studies based on a similar
model specification (Table 5). The large differences between estimates
are associated mostly with the modelling framework and data utilized
(Andreyeva et al., 2010). In general, studies show that SSBs are price-
elastic, meaning that consumptions drops more than proportionally to
price increases. Our results are somewhat comparable to recent studies
done for Mexico and Ecuador report price-elasticities of −1.16 and
−1.2 respectively (Colchero et al., 2015; Paraje, 2016). Although si-
milar results across Latin American countries are expected due to
commonalities on cultural and socioeconomic conditions, there are also
significant differences in the food categorization, data quality and
methods used across the aforementioned studies, which limit further
comparisons of the results.
In contrast, evidence on price-elasticity for energy-dense processed
foods is less conclusive, mainly because there is a lack of consensus
regarding the definition of ‘junk’ food. (Zhen et al., 2013) reports price-
elasticity of −1.67 to −1.1 for ice cream, candy, cakes and snacks,
while (Colchero et al., 2015) finds similar results (−0.98 to −1.15 for
candy and snacks). Meanwhile, cross-country meta-analyses have found
that the own-price elasticity of sweets, confectionary and sweetened
beverages to be inelastic at −0.56 in high-income countries, −0.68 in
middle-income countries, and −0.74 in low-income countries
(Cornelsen et al., 2015; Green et al., 2013).
By socioeconomic level, low income households report a higher
own-price elasticity for RTD SSBs, sweets and desserts, fruits/vege-
tables and seafood, and milk, which is consistent with these items being
relatively more expensive (compared to alternatives) and thus poten-
tially being considered as ‘luxury’ for lower-income households. In the
case of SSBs from concentrate, the own-price elasticity is lower in low
income households compared with their mid-high income counterparts
likely because of the low relative price of SSB from concentrates com-
pared to RTD SSBs and high average consumption, it appears that these
types of beverages are considered part of the basic diet for low income
households.
5. Policy implications
Regarding tax simulations, we consider our results as a benchmark
to compare alternative similar tax policy scenarios. A tax based on the
new marketing and labelling restriction regulation is quite possible
since mandatory labelling will ease the process of identifying taxed
items and implementing the tax. Furthermore, these results could be
boosted by the marking control scheme, however we cannot explore
those effects in the context of our analysis. Although not a part of this
study, from the tax simulations presented here, is expected that the tax
on foods high in fats, salt and sugar will also yield the highest revenue,
due to the broader tax base (on both ‘junk’ foods and SSBs). It is also
important to consider that additional fiscal earnings could be used in
ways proven by evidence to enhance the health impact of the tax, such
as education programs or subsidies towards healthier foods or bev-
erages. In particular, funds could be used to enhance acceptability and

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nutritional value of the school meal program, which currently covers
school attending children in the 60% lowest income households with up
to three meals a day (JUNAEB, 2015). Recent studies for the United
States indicate that such modifications to the school meal programs
yield significant effects on health outcomes for children (Gundersen,
2015; Schanzenbach and Zaki, 2014).
It is important to remark that the results of the policy simulations
are only valid from a household purchasing perspective, assuming that
individual’s average response to prices is symmetric and invariant to
the framing of the tax. Recent studies indicate that other equivalent
policy alternatives, such as subsidies, subsidy-tax combinations, or
item-specific taxes could yield different results, reflecting that in-
dividuals’ behavior is not necessarily symmetric, although not drasti-
cally different (Chen et al., 2015; Härkänen et al., 2014; Juhl and
Jensen, 2014).
In the same line, the estimated model has several limitations.
First, the data does not allow us to further separate food items that
have added sugar from artificially sweetened products. For example,
we cannot separate regular sodas from diet sodas, although diet soda
consumption in Chile represent less than 20% of total consumption
(Euromonitor, 2015). Second, we are unable to separate healthier
staples (e.g., whole grains and legumes) from less healthy refined
carbohydrate breads. These two elements generate some degree of
misclassification across the food groups, affecting the nutrient
availability simulation results. However, there is also mis-
classification in some groups that were not included in the tax si-
mulations (e.g. meat products), therefore the overall bias direction
is unclear. Third, the limited sample size and the large proportion of
non-consumers for some groups did not allow us to examine sepa-
rately some of the healthier subcategories (e.g., legumes, poultry
and fish). Sample size limitations also did not allow us to differ-
entiate more finely among low, middle and higher income house-
holds. Fourth, it is not currently possible to model or make as-
sumptions about how the marketing control and FOP labelling
scheme will affect our tax simulations; it is possible that these laws
could encourage the food manufacturers to reformulate their pro-
ducts, which may also leading to a reduction in the universe of
products being potentially taxed, as well as shift the structure of
consumption and affect all three tax scenarios considered. More-
over, as we note earlier, our model does not control for potential
endogeneity in prices because there was not sufficient local level
disaggregated data to properly correct for this. Because we had to
rely on implicit unit prices, these may have attenuated our own-
price elasticity estimates, but the bias on cross-price elasticities are
unclear. Finally, following the literature, our model imposes the
typical restrictions on homogeneity and symmetry (but relaxes the
adding-up restrictions). We believe this is reasonable because recent
literature suggests that the rejection of homogeneity restriction is
often due to model specification rather that the true nature of data
(Haag et al., 2009).
It is also important to consider that our model does not account for
other types of household and industry behavior. In particular, in-
dividuals could switch between different product varieties with sig-
nificantly different nutrient composition, potentially moving to items
with lower price and lesser nutritional value (Fletcher et al., 2013).
Also, we cannot in any way examine leakages in the system (e.g. black
marketing of selected products or bringing across the border untaxed
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Food Policy 71 (2017) 86–100
items illegally). However, unlike cigarettes, food and beverage items
are fairly bulky and cheap and we do not expect excessive smuggling,
stockpiling or other similar leakages. Finally, in our simulations we
assume that the tax is fully and uniformly passed-through onto retail
prices, without considering strategic firm behavior (e.g., firms could
cost-shift in various ways, such as spread the tax across their products
regardless of the taxation status, or over-/under-shift in select products)
(Bonnet and Réquillart, 2013; Colchero et al., 2015).
Despite these limitations, the findings of meaningful caloric, so-
dium, saturated fat and sugar reductions from the 18% tax on food and
beverages high in fat, salt and sugar, suggests that this policy is parti-
cularly worth considering, especially because it could be easily in-
tegrated to other nutrition-related regulations on marketing and FOP
labelling. From an implementation standpoint, the FOP labelling
scheme is expected to provide important insights regarding the current
food supply before a new tax is implemented, so the problems with
delineation of unhealthy products will be clarified by the authorities.
6. Conclusion
Improving the diet of any country is a very complex process.
Globally, the shift towards highly processed diets with excessive so-
dium, added sugar, unhealthy fats and highly refined carbohydrates has
defined the global dietary shift of the past several decades (Monteiro
et al., 2013; Popkin et al., 2012; Poti et al., 2015). A new paradigm
involving much healthier diets requires a large number of changes,
including ultimately shifts in the culture of eating, a reduction of
marketing of unhealthy foods and beverages, FOP labelling of either
healthy or unhealthy foods and beverages, and shifts in the relative
prices to encourage significant changes towards healthier food pur-
chases (Anand et al., 2015). Chile is unique in currently having already
instituted a small price increase among SSBs (since October 2014), and
using both marketing controls and FOP labelling of unhealthy foods and
beverages since July 2016 to begin this process (Corvalán et al., 2013).
The design of a larger tax to enhance the overall effect into a healthier
Chilean diet is a next critical step. This study has shown that expanding
the existing tax to include other market-controlled foods beyond just
SSBs will result in meaningful reductions in nutrients of concern, and
yield higher revenues potentially to be used towards public health
promotion and investments. Clearly if such a tax is implemented, rig-
orous careful evaluation is needed to understand if it achieves its goals.
Acknowledgements
We thank our funders and also wish to thank Ms. Camila Corvalán
and Ms. Marcela Reyes for providing the nutritional food panel dataset
for Chile, Ms. Natalia Rebolledo for linking the nutritional information
per 100 g for the foods and beverages in the survey, Ms. Frances L.
Dancy for administrative assistance, and Ms. Denise Ammons for gra-
phics support. None of the authors have conflict of interests of any type
with respect to this manuscript.
Funding
Funding for this research comes predominantly from Bloomberg
Philanthropies with added funding from the International Development
Research Center and CPC P2C HD050924.
J.C. Caro et al. Food Policy 71 (2017) 86–100

Appendix A

See Tables A1–A7.

Table A1
Food group description and average nutrient content per 100 g.

Food group Description kcal Sugar (g) Sodium (mg) Fat (g) Saturated fat (g) Protein (g)

Sweets and desserts†,‡ Pastries, chocolate, candy, ice cream, yogurts, desserts, breakfast cereals 294.9 39.9 106.3 7.9 3.9 3.5
Salty snacks and chips‡ Cocktail items, potato chips 518.2 1.7 585.2 29.4 3.8 6.1
Meat products and fats Meats, sausages, patties, oils, butter, margarine 295.1 0.5 352.6 25.3 8.4 15.8
F+V and seafood All fresh and frozen fruits and vegetables, pulses, fish and seafood 68.7 4.6 48.7 1.8 0.3 3.5
Grain-based staples Bread, rice, flour, pasta and oats 244.9 1.3 189.9 2.3 0.6 8.7
SSB ready-to-drink*,†,‡ Sodas, juices, nectars and flavored waters 37.4 9.0 13.0 0.0 0.0 0.3
SSB concentrate*,†,‡ Juices based on powder or concentrate 14.3 3.3 11.0 0.0 0.0 0.6
Water, coffee and tea Bottled water, coffee, tea and infusions 0.7 0.0 2.2 0.0 0.0 0.0
Milk Plain (unsweetened) milks only 46.9 4.8 59.2 1.6 1.0 3.1

Source: Nutrient data are from a survey of 6000 Chilean foods and beverages with barcodes collected in 2015 (INTA, 2015). Food group level nutritional values were calculated as a
weighted average of the nutrients per 100 g, based on average purchases of all food products within each food group.
Note: Calculations based on median purchases per household and reconstituted foods. F+V: fruits and vegetables. SSBs from concentrate are considered in the ‘junk’ food tax given that
some items are affected by the FOP labelling scheme.
‡
Subject to 18% tax on marketing controlled food and beverages (‘junk’ food tax).
* Subject to 40% SSBs tax.
†
Subject to 1 Chilean peso per gram of sugar tax.

Table A2
Nutrient limits and implementation dates for marketing control and front-of-package (FOP) labelling scheme in Chile.

June 2017 June 2018 June 2019

A. Foods
Energy, kcal/100 g 350 300 275
Sodium, mg/100 g 800 500 400
Total sugar, g/100 g 22.5 15 10
Saturated fat, g/100 g 6 5 4

B. Beverages
Energy, kcal/100 g 100 80 70
Sodium, mg/100 g 100 100 100
Total sugar, g/100 g 6 5 5
Saturated fat, g/100 g 3 3 3

Table A3
Expenditure statistics by socioeconomic group (in ml or gr.)

Low income (N = 4697) Mid-high income (N = 5786)

Food group Mean expenditure Median quantity per capita Expenditure > 0 (%) Mean expenditure Median quantity per capita Expenditure > 0 (%)
share (all households) share (all households)

Sweets and desserts 0.13 90 88% 0.16 119 96

Salty snacks and 0.03 5 25% 0.03 6 41
chips
Meat products and 0.33 163 97% 0.34 198 98
fats
F+V and seafood 0.19 316 94% 0.19 359 96
Grain-based staples 0.26 368 99% 0.18 310 99
SSB, ready to drink 0.10 213 80% 0.10 260 89
SSB, concentrate 0.02 206 36% 0.02 239 35
Water, coffee and tea 0.04 548 41% 0.03 531 55
Milk 0.05 83 46% 0.05 114 59

Source: Chilean Income and Expenditure Survey (EPS) 2011–2012 (Instituto Nacional de Estadística de Chile, 2013).
Note: F+V: fruits and vegetables; SSB = Sugar sweetened beverages.

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J.C. Caro et al. Food Policy 71 (2017) 86–100

Table A4
Uncompensated elasticities from censored QUAIDS model with corrections for potential endogeneity in expenditures among low income households (N = 4,697).

Change in price

Change in quantity Sweets and Salty snacks Meat products F+V and Grain based SSB, ready to SSB, Water, coffee Milk
desserts and chips and fats seafood staples drink concentrate and tea

Sweets and desserts −0.866*** 0.044 −0.115 0.375* 0.399 0.222*** 0.026 0.003 −0.000
0.07 0.04 0.09 0.23 0.22 0.08 0.03 0.02 0.02
Salty snacks and 1.763 −1.667 0.491 −4.736 −3.705 −1.338 −0.061 −0.170 0.108
chips 1.41 1.45 1.36 3.69 2.59 1.05 0.25 0.37 0.32
Meat products and −0.091*** 0.020 −0.877*** 0.148* 0.103 −0.037 0.002 0.004 0.011
fats 0.03 0.03 0.04 0.09 0.08 0.04 0.01 0.01 0.01
F+V and seafood 0.015 −0.027 −0.009 −1.226*** −0.527*** −0.047 −0.025 −0.012 −0.005
0.07 0.02 0.10 0.24 0.18 0.06 0.02 0.02 0.02
Grain based staples −0.126** 0.007 −0.028 0.167*** −0.732*** 0.066 0.016 0.028 0.099***
0.06 0.04 0.08 0.17 0.12 0.05 0.02 0.03 0.02
SSB, ready to drink 0.450* −0.087 −0.246 −0.839 −0.711 −1.300*** −0.030 0.008 0.050
0.25 0.11 0.19 0.55 0.50 0.26 0.03 0.06 0.05
SSB, concentrate −0.316* 0.152 −0.113 0.937** 0.981** 0.256 −1.301*** 0.084* 0.248*
0.20 0.26 0.21 0.47 0.46 0.18 0.28 0.05 0.14
Water, coffee and −0.273** 0.049 −0.059 0.423 0.433 0.332*** 0.028 −1.429*** 0.038
tea 0.13 0.08 0.16 0.36 0.39 0.17 0.04 0.14 0.06
Milk −0.103 0.099 0.072 0.124*** 0.857*** 0.267*** 0.084 0.021 −2.325***
0.07 0.09 0.13 0.18 0.21 0.11 0.05 0.04 0.20

Source: Chilean Income and Expenditure Survey (EPS) 2011–2012 (Instituto Nacional de Estadística de Chile, 2013).
Note: F+V = fruits and vegetables; SSB = Sugar sweetened beverages; bold denote own-price elasticities.
* p < 0.1.
** p < 0.05.
*** p < 0.01.

Table A5
Uncompensated elasticities from censored QUAIDS model with corrections for potential endogeneity in expenditures among mid-high income households (N = 5786).

Change in price

Change in quantity Sweets and Salty snacks and Meat products F+V and Grain based SSB, ready to SSB, Water, coffee Milk
desserts chips and fats seafood staples drink concentrate and tea

Sweets and desserts −0.794*** 0.029* −0.145 −0.145 0.0413 0.0429 −0.001 −0.011 −0.030
0.05 0.02 0.14 0.21 0.09 0.04 0.01 0.02 0.02
Salty snacks and 0.198* −1.962*** 0.247 0.185 0.408** −0.138 0.275*** 0.077 0.445***
chips 0.10 0.12 0.26 0.39 0.21 0.09 0.06 0.05 0.09
Meat products and −0.085*** −0.005 −0.908*** 0.163*** −0.028 −0.015 −0.002 0.014 0.011
fats 0.02 0.01 0.03 0.05 0.03 0.02 0.00 0.01 0.01
F+V and seafood −0.116*** −0.016* 0.154** −0.900*** −0.146*** −0.034 0.000 0.014 0.028***
0.04 0.01 0.07 0.08 0.05 0.04 0.01 0.02 0.01
Grain based staples −0.075 −0.009 0.187 0.318* −0.729*** 0.029 0.030*** 0.002 0.124***
0.06 0.02 0.13 0.19 0.07 0.06 0.01 0.04 0.03
SSB, ready to drink 0.317** 0.044 −0.678*** −1.049*** −0.327 −1.111*** −0.022 0.002 −0.016
0.16 0.04 0.26 0.36 0.20 0.19 0.02 0.09 0.05
SSB, concentrate −0.180** 0.397*** 0.224 0.672*** 0.547*** 0.113 −1.601*** −0.001 0.078
0.09 0.10 0.18 0.22 0.15 0.11 0.19 0.07 0.08
Water, coffee and 0.214 0.124 −0.582 −1.057 −0.597 0.183 −0.052 −1.412*** −0.042
tea 0.45 0.11 0.94 1.47 0.64 0.24 0.06 0.36 0.14
Milk −0.153*** 0.194*** 0.065 0.194 0.460*** 0.219*** 0.005 0.046 −1.983***
0.05 0.04 0.14 0.18 0.10 0.05 0.02 0.03 0.06

Source: Chilean Income and Expenditure Survey (EPS) 2011–2012 (Instituto Nacional de Estadística de Chile, 2013).
Note: F+V = fruits and vegetables; SSB = Sugar sweetened beverages; bold denote own-price elasticities.
* p < 0.1.
** p < 0.05.
*** p < 0.01.

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Table A6
Policy Scenario simulation results for change in nutrient availability among low income households (N = 4,697).

Policy 1: 18% tax on marketing controlled foods and beverages

Nutrient per AE Sweets and Salty snacks Meat products F+V and Grain based SSB, ready to SSB, Water, Milk TOTAL
per day desserts§ and chips§ and fats seafood staples drink§ concentrate§ Coffee + tea

Calories −24.26*** −0.74 −5.37*** −0.83 −12.18 0.29 −1.47* −0.04 0.35 −44.26***
1.55 3.90 1.58 1.75 7.76 1.61 0.81 0.05 0.45 5.38
Carbohy-drates −4.33*** −0.08 −0.01*** −0.13 −2.33 0.07 −0.35* −0.01 0.03 −7.15***
(g) 0.28 0.43 0.00 0.28 1.49 0.40 0.19 0.02 0.05 1.12
Sugar (g) −3.28*** −0.00 −0.00*** −0.05 −0.06 0.07 −0.34* 0 0.03 −3.64***
0.21 0.01 0.00 0.12 0.04 0.39 0.19 0.05 0.31
Sodium (mg) −8.74*** −0.83 −6.41*** −0.58 −9.44 0.10 −1.13* −0.13 0.44 −26.76***
0.56 4.40 1.89 1.24 6.02 0.56 0.62 0.17 0.57 4.50
Fats (g) −0.65*** −0.04 −0.46*** −0.02 −0.12 0 0 0 0.01 −1.29***
0.04 0.22 0.14 0.05 0.08 0.02 0.17
Saturated Fats (g) −0.32*** −0.00 −0.15*** −0.00 −0.01 0 0 0 0.00 −0.49***
0.02 0.03 0.05 0.01 0.01 0.01 0.05
Protein (g) −0.28*** −0.00 −0.28*** −0.04 −0.43 0.00 −0.06* 0 0.02 −1.09***
0.02 0.05 0.08 0.09 0.28 0.01 0.03 0.03 0.26

Policy 2: 40% tax on SSBs

Nutrient per AE Sweets and Salty snacks Meat products F+V and Grain based SSB, ready to SSB, Water, Milk TOTAL
per day desserts and chips and fats seafood staples drink§ concentrate§ Coffee + tea

Calories 10.59*** −5.44 −3.14 −2.66 13.82 −17.04*** −4.82*** 0.15** 1.96*** −6.58
3.98 4.14 4.32 2.76 8.73 3.41 1.49 0.08 0.67 7.86
Carbohy-drates 1.89*** −0.59 −0.00 −0.42 2.65 −4.23*** −1.14*** 0.04** 0.21*** −1.60
(g) 0.71 0.45 0.01 0.44 1.68 0.85 0.35 0.02 0.07 1.27
Sugar (g) 1.43*** −0.01 −0.00 −0.17 0.07 −4.10*** −1.11*** 0 0.20*** −3.70***
0.54 0.01 0.01 0.18 0.05 0.82 0.34 0.07 0.56
Sodium (mg) 3.81*** −6.14 −3.76 −1.88 10.72 −5.92*** −3.71*** 0.50** 2.47*** −3.91
1.43 4.67 5.16 1.96 6.77 1.18 1.14 0.24 0.84 7.10
Fats (g) 0.28*** −0.30 −0.26 −0.06 0.14 0 0 0 0.06*** −0.15
0.11 0.23 0.37 0.07 0.09 0.02 0.35
Saturated Fats (g) 0.14*** −0.03 −0.08 −0.01 0.01 0 0 0 0.04*** 0.05
0.05 0.03 0.12 0.01 0.01 0.01 0.15
Protein (g) 0.12*** −0.06 −0.16 −0.13 0.49 −0.13 ***
−0.20 ***
0 0.12*** 0.03
0.05 0.05 0.23 0.14 0.31 0.03 0.06 0.04 0.37

Policy 3: 1 CLP (0.2 US cents) tax per gram of sugar

Nutrient per AE Sweets and Salty snacks Meat products F+V and Grain based SSB, ready to SSB, Water, Milk TOTAL
per day desserts§ and chips and fats seafood staples drink§ concentrate§ Coffee + tea

Calories −11.22*** 0.34 −5.26*** −1.38 −1.78 −6.01*** −5.08*** 0.02 0.87** −29.51***
1.69 1.64 1.83 1.56 4.57 1.07 1.11 0.04 0.37 3.18
Carbohy-drates −2.00*** 0.03 −0.01*** −0.22 −0.34 −1.49*** −1.20*** 0.00 0.09** −5.14***
(g) 0.30 0.18 0.01 0.25 0.88 0.27 0.26 0.01 0.04 0.69
Sugar (g) −1.51*** 0.00 −0.00*** −0.09 −0.00 −1.44*** −1.17*** 0 0.08** −4.16***
0.23 0.01 0.00 0.10 0.02 0.26 0.26 0.04 0.33
Sodium (mg) −4.04*** 0.38 −6.28*** −0.98 −1.38 −2.08*** −3.91*** 0.09 1.10** −17.12***
0.61 1.86 2.19 1.11 3.54 0.37 0.85 0.13 0.47 2.65
Fats (g) −0.30*** 0.02 −0.45*** −0.03 −0.01 0 0 0 0.02** −0.75***
0.05 0.09 0.16 0.04 0.05 0.01 0.15
Saturated Fats (g) −0.14*** 0.00 −0.14*** −0.00 −0.00 0 0 0 0.02** −0.28***
0.02 0.01 0.05 0.01 0.01 0.01 0.06
Protein (g) −0.13*** 0.00 −0.28*** −0.07 −0.06 −0.04*** −0.21*** 0 0.05** −0.74***
0.02 0.02 0.10 0.08 0.16 0.01 0.05 0.02 0.16

Note: AE = adult equivalents; F+V=fruits and vegetables; SSB = Sugar sweetened beverages.
§
Subject to tax.
* p < 0.1.
** p < 0.05.
*** p < 0.01.

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J.C. Caro et al. Food Policy 71 (2017) 86–100

Table A7
Policy Scenario simulation results for change in nutrient availability among mid-high income households (N = 5,786).

Policy 1: 18% tax on marketing controlled foods and beverages

Nutrient per AE Sweets and Salty snacks Meat products F+V and Grain based SSB, ready to SSB, Water, Milk TOTAL
per day desserts§ and chips§ and fats seafood staples drink§ concentrate§ Coffee + tea

Calories −34.63*** −6.20*** −7.73*** −4.52*** −7.12 0.90 −0.67 0.13 0.51 −59.34***
2.61 0.57 1.77 1.37 7.20 1.93 0.55 0.18 0.40 6.95
Carbohy-drates −6.18*** −0.67*** −0.02*** −0.72*** −1.37 0.22 −0.16 0.04 0.06 −8.82***
(g) 0.47 0.06 0.01 0.22 1.38 0.48 0.13 0.05 0.04 1.15
Sugar (g) −4.68*** −0.02*** −0.01*** −0.30*** −0.04 0.22 −0.16 0.00 0.05 −4.94***
0.35 0.00 0.00 0.09 0.04 0.46 0.13 0.04 0.46
Sodium (mg) −12.48*** −7.00*** −9.24*** −3.21*** −5.52 0.31 −0.52 0.41 0.65 −36.61***
0.94 0.65 2.11 0.97 5.58 0.67 0.43 0.55 0.50 6.18
Fats (g) −0.92*** −0.35*** −0.66*** −0.11*** −0.08 0 0 0 0.02 −2.11***
0.07 0.03 0.15 0.04 0.08 0.01 0.20
Saturated Fats −0.45*** −0.04*** −0.22*** −0.02*** −0.01 0 0 0 0.01 −0.74***
(g) 0.03 0.00 0.05 0.01 0.01 0.01 0.06
Protein (g) −0.41*** −0.07*** −0.41*** −0.23*** −0.25 0.01 −0.03 0 0.03 −1.36***
0.03 0.01 0.09 0.07 0.26 0.02 0.02 0.03 0.34

Policy 2: 40% tax on SSBs

Nutrient per AE Sweets and Salty snacks Meat products F+V and Grain based SSB, ready to SSB, Water, Milk TOTAL
per day desserts and chips and fats seafood staples drink§ concentrate§ Coffee + tea

Calories 2.56 0.66 −1.95 −1.46 8.25 −17.30*** −8.60*** 0.06 1.60*** −16.18*
2.62 0.52 2.41 1.86 9.18 3.04 1.19 0.13 0.42 8.40
Carbohy-drates 0.46 0.07 −0.01 −0.23 1.58 −4.30*** −2.04*** 0.02 0.17*** −4.28***
(g) 0.47 0.06 0.01 0.30 1.76 0.76 0.28 0.04 0.05 1.23
Sugar (g) 0.35 0.00 0.00 −0.10 0.04 −4.16*** −1.98*** 0.00 0.16*** −5.69***
0.35 0.00 0.00 0.12 0.05 0.73 0.28 0.04 0.76
Sodium (mg) 0.92 0.74 −2.33 −1.04 6.40 −6.01*** −6.61*** 0.19 2.01*** −5.72
0.94 0.59 2.88 1.32 7.12 1.06 0.92 0.39 0.53 8.75
Fats (g) 0.07 0.04 −0.17 −0.04 0.09 0 0 0 0.05*** 0.04
0.07 0.03 0.21 0.05 0.10 0.01 0.28
Saturated Fats 0.03 0.00 −0.06 −0.01 0.01 0 0 0 0.034*** 0.02
(g) 0.03 0.00 0.07 0.01 0.01 0.01 0.07
Protein (g) 0.03 0.01 −0.10 −0.07 0.29 −0.13 ***
−0.36 ***
0 0.10*** −0.24
0.03 0.01 0.13 0.09 0.33 0.02 0.05 0.03 0.47

Policy 3: 1 CLP (0.2 US cents) tax per gram of sugar

Nutrient per AE Sweets and Salty snacks Meat products F+V and Grain based SSB, ready to SSB, Water, Milk TOTAL
per day desserts§ and chips and fats seafood staples drink§ concentrate§ Coffee + tea

Calories −21.02*** 1.20*** −5.31*** −3.00*** 0.84 −6.55*** −7.86*** 0.07 0.31 −41.33***
1.88 0.32 1.44 1.10 5.43 1.55 0.98 0.07 0.26 4.73
Carbohy-drates −3.75*** 0.13*** −0.01*** −0.48*** 0.16 −1.62*** −1.87*** 0.02 0.03 −7.40***
(g) 0.34 0.04 0.00 0.18 1.04 0.39 0.23 0.02 0.03 0.70
Sugar (g) −2.84*** 0.00*** −0.00*** −0.20*** 0.00 −1.57*** −1.81*** 0.00 0.03 −6.40***
0.25 0.00 0.00 0.07 0.03 0.37 0.23 0.03 0.48
Sodium (mg) −7.57*** 1.35*** −6.35*** −2.12*** 0.65 −2.27*** −6.05*** 0.21 0.40 −21.77***
0.68 0.37 1.72 0.78 4.21 0.54 0.75 0.22 0.33 5.07
Fats (g) −0.56*** 0.06*** −0.45*** −0.07*** 0.01 0 0 0 0.01 −1.00***
0.05 0.02 0.12 0.03 0.06 0.01 0.16
Saturated Fats −0.27*** 0.00*** −0.15*** −0.013*** 0.00 0 0 0 0.01 −0.42***
(g) 0.02 0.00 0.04 0.00 0.01 0.01 0.04
Protein (g) −0.24*** 0.01*** −0.28*** −0.15*** 0.03 −0.05*** −0.33*** 0 0.02 −1.00***
0.02 0.00 0.08 0.06 0.19 0.01 0.04 0.02 0.27

Note: AE = adult equivalents; F+V = fruits and vegetables; SSB = Sugar sweetened beverages.
**
p < 0.05.
§
Subject to tax.
* p < 0.1.
*** p < 0.01.

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