Research Report

The Total Economic Impacts of Philadelphia’s Beverage Tax

 

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Policy Brief

News Release

Highlights

  • Even without valuing health benefits to citizens of Philadelphia, the Philadelphia Beverage Tax (PBT) is likely to have a net positive effect on city residents.
  • The total estimated economic impact of the PBT on Philadelphia’s overall economy is roughly neutral with gains almost entirely offsetting costs without even accounting for estimated increases in employment for parents of children enrolled in PHLpreK.
  • When estimated increases in employment for parents of children enrolled in PHLpreK are added, PHLpreK clearly provides a net benefit to Philadelphia’s economy and fiscal balance despite the tax.
  • This study is the first to examine the PBT’s full impact on Philadelphia’s overall economy (a macroeconomic perspective). Previous studies provided only partial (microeconomic) accountings of the PBT’s impacts. For example, they focused only on the effects on beverage purchases or on changes in specific industries.
  • A macroeconomic model (specifically a computable general equilibrium model) for Philadelphia was specially constructed to estimate the direct and economic effects of the tax and PHLpreK for this study.

The Authors

Dr. Milagros Nores is the Co-Director for Research and Associate Research Professor at the National Institute for Early Education Research (NIEER). With a profound expertise in early childhood evaluation, informing data-driven policy and programming, cost and benefits of early interventions, evaluation design, equity, and English language learners, she has established herself as a leading researcher in the field of early care and education.