This is a very bold claim being made here.
The report by the two organisations says obesity is set to climb from 29% in 2015 to 34% in 2025. But their modelling suggests that the 5% increase could be avoided by a 20% tax on sugary drinks. They call for the introduction of a tax, alongside other measures.
Implicit in that calculation is that they know how the consumption of soda pop changes with changes in the price of soda pop. And that’s a very, very, strong claim to be making.
Every producer of everything in the world would love to know exactly what the elasticity of their product is. And we can make some good general guesses too. In the short term the demand (and supply too) of oil is inelastic which is why we get wild price swings. Cinema tickets rather more elastic. But we rarely do claim that we really know what the number is, rather than somewhere in the range. And we also really don’t claim to know the actual number for something as specific as soda pop.
The reason we don’t claim so? Because if it were easy enough to find out then every manufacturer of everything would be able to optimise their pricing systems. And we really don’t think that they do therefore we don’t think that it’s all that easy to find.
But, you know, maybe Cancer Research UK and the UK Health Forum really are employing economists who can do what Coca Cola, Pepsi and all the rest have been struggling to do for decades.