The Tax‐Equivalent Effect of Information: Evidence From an Incentivised Laboratory Experiment on Sugary Drinks

ABSTRACT Interventions to reduce consumption of sugar‐sweetened beverages have been a popular topic of research in agricultural economics and food policy in recent years. While most empirical attention has focused on excise taxation and quasi‐experimental evaluation of implemented taxes, less is known about the magnitude of behavioural responses to information‐based interventions under incentive‐compatible conditions. We report results from an incentivised laboratory experiment conducted in New Zealand in which participants made repeated beverage purchase decisions with real economic consequences. After five purchase rounds across multiple price regimes, subjects were exposed to a salient health‐information intervention and then repeated the same decisions. The information intervention reduced the unconditional quantity purchased by approximately 25% (except for one sugar‐free variant). Comparing these effects to experimentally induced price changes implies a tax‐equivalent magnitude similar to a specific excise of roughly 50 cents per litre; given the experimental design, this should be interpreted as an upper‐bound estimate of the immediate response to a highly salient information intervention under laboratory conditions.