Affordability of beer and soft drinks in 15 Latin American countries

Abstract

Objective. The objective of this study was to look at trends in the affordability of beer and soft drinks in 15 Latin American countries. Methods. The data correspond to government statistics pertaining to price indices for beer and soft drinks, the consumer price index, and the nominal wage index based on monthly frequency. The methods involved the performance of an econometric analysis, using time series, to measure the expected rate of increase in the absolute affordability indicator (using nominal prices) or the relative affordability indicator (using general prices) for soft drinks and beers. Results. In nine of the 15 countries analyzed, the affordability of soft drinks or beer (whether absolute or relative) has shown a statistically significant increase. In the case of soft drinks, absolute affordability increased in five countries (Chile, Colombia, Costa Rica, Ecuador, and Uruguay) and decreased in Mexico. In the case of beer, it increased in Colombia and Ecuador, remained unchanged in Argentina, Brazil, Chile, Costa Rica, and Uruguay, and dropped in Mexico. Conclusions. Although most countries levy taxes on beer and soft drinks, the effect of such taxes on price has not been enough to reduce the affordability of these products in all countries in the sample. Taxes should be modified to make these beverages less affordable and have an impact on their consumption.