PONE-D-23-03690Demand Price Elasticity for Ready-To-Drink Sugar-Sweetened Beverages in BrazilPLOS ONE

Dear Dr. Santiago,

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Mohammed Al-Mahish

Academic Editor

PLOS ONE

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Additional Editor Comments:

One reviewer recommended rejecting your paper while another reviewer recommended a minor revision. Thus, I have decided to give you a second chance to improve your paper by addressing reviewers comments as well as the following comments:

1. Make sure your paper meets PLOS ONE style including referencing style
2. The estimated results of own price elasticity of water and milk showed that they are price elastic, which is not practically realistic. Thus, make sure to conduct diagnostic tests to asses the validity of your model. Also, report and discuss goodness of fit measures. You may consider omitting water and milk if the omission will not result in omitted variable bias.
3. If you want to estimate price elasticity by income group as reported in table 8, you may consider using quantile regression.
4. Please check the numbering of your tables. It seems tables 4-6 are missing.

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Reviewers' comments:

Reviewer's Responses to Questions

Comments to the Author

1. Is the manuscript technically sound, and do the data support the conclusions?

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Reviewer #1: No

Reviewer #2: Yes

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2. Has the statistical analysis been performed appropriately and rigorously?

Reviewer #1: No

Reviewer #2: Yes

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Reviewer #1: No

Reviewer #2: Yes

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Reviewer #1: No

Reviewer #2: Yes

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5. Review Comments to the Author

Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters)

Reviewer #1: This study aims to estimate the price elasticity of demand for ready-to-drink sugar sweetened beverages in Brazil. The findings show that a taxation policy on ready-to-drink sweetened beverages has the potential to reduce the sugar consumption of the Brazilian population since an increase in the price of the product will lead to a more than proportional decrease in its demand.

Below are the major concerns for the authors to consider.

1. The aim and foremost contribution of this study is to estimate price elasticities. Unfortunately, there is no detail throughout the paper about their price data, not even any summary statistics. Household Budget/Expenditure Survey do not normally contain detailed individual household price data. It is not clear what prices they use in estimating QUAIDS. Chances are they probably used price indices which only vary along time but are invariant across households. If this is the case, compared to the detailed household consumption data, there is concerning lack of variation in the price data. Please see Hoderlein and Mihaleva (2008) for more details and solutions.

2. In Table 1, the sum of all Shares of Income Spent (%) in the last column is 99.98%, which means Brazilian households spent almost all their income on food. There was no spending on clothing, housing, health, education etc, which is not possible. I think what it means by Income in the paper is actually total Food expenditure. If this is the case, it is fine to call what they estimated expenditure elasticities, but cannot say much about how consumption of RTD SSBs is related to the household total budget/income by only looking at the estimated expenditure elasticities. It is possible that as household income increases, they might increas their share of spending more on luxuries, cars, holidays etc, leading to lower share of Food in the total budget. To really link consumption of SSBs to the income, assuming weakly separable household utility, how households allocate their total budget among more broad categories such as Food, Clothing, Education, Health etc, should be specified and estimated on top of the current demand system specified for the sub-categories within Food.

3. When using micro household level consumption data, how to properly deal with zero consumption to produce unbiased estimates is a very important issue, which has seen a large number of very significant studies in the literature by leading scholars. Unfortunately, in this paper, the authors failed to provide sufficient details as to how they deal with the zeros as a standalone paper. Only two minor references were provide, one of which is not in English making it very difficult for non-Spanish readers to follow. It is fine to model zero consumption decisions separately using probit; however, questions such as how the estimated probabilities were included in the estimation of the demand system, how the expected elasticities for the whole sample were derived and how they produced the corresponding standard errors, using Delta methods or Bootstrap, are unfortunately not clear at all.

Reference:

Hoderlein, S. and Mihaleva, S. (2008), ‘Increasing the Price Variation in a Repeated Cross Section’, Journal of Econometrics, 147, 316–25.

Reviewer #2: The paper discusses an interesting issue of policy relevance; Demand Price Elasticity for Ready-To-Drink Sugar-Sweetened Beverages in Brazil. While the paper is well delivered, I provide some comments for improvement.

1. The term ‘Demand Price Elasticity’ should be checked in title.

2. What are the contribution of the research to the literature, policy planners and consumers should add to the abstract.

3. Introduction needs some data of how much percentage of SSB consumption increased between 2009 and 2014 in Latin American countries. Similarly how much percentage of risk of developing obesity and diseases increased in?

4. How taxation policy impacted on price of sugar-sweetened beverages need some explanation for general reader in introduction.

5. Page 7 in Introduction paragraph 2 Drop in productivity of what?

6. Research objectives/research questions are not well defined, expenditure and income spent on SSB by type of SSB and subgroups are omitted to be belonging to the objectives.

7. The rationale and applicability of applying the Quadratic Almost Ideal Demand System (QUAIDS) methods needs to be further explained.

8. Where is the estimated probit models? Please give the equation with empirical model, and variable explanation is better placing in a table instead of description. And please also provide the steps where consumption probabilities were inserted into the estimation of the demand system and the subsequent calculation of elasticities.

9. Page 13, 2nd paragraph, what does it mean ‘24.05% of the families’? Is it surveyed families, please make it clear.

10. The data and analyses are well described.

11. In concluding section (last paragraph) please correlate the tax with price and add a strong policy implication based on findings.

12. Please provide the data of prices and annual demand (if possible, otherwise amount of consumption) for all SSB in 2017-2018 as supplementary.

13. Finally, the language needs further polishing.

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Reviewer #1: No

Reviewer #2: Yes: Mst. Esmat Ara Begum (BARI034), Senior Scientific Officer, Bangladesh Agricultural Research Institute

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PONE-D-23-03690R1Price elasticity of demand for ready-to-drink sugar-sweetened beverages in BrazilPLOS ONE

Dear Dr. Santiago,

Thank you for submitting your manuscript to PLOS ONE. After careful consideration, we feel that it has merit but does not fully meet PLOS ONE’s publication criteria as it currently stands. Therefore, we invite you to submit a revised version of the manuscript that addresses the points raised during the review process.

==============================

ACADEMIC EDITOR:

Although the paper has been improved, one of the reviewers has asked for a major correction on your model. Also, the necessary model’s diagnostic tests and goodness of fit measures are still missing.Thus, I invite you for a second revision to address those concerns.

==============================

Please submit your revised manuscript by Jul 28 2023 11:59PM. If you will need more time than this to complete your revisions, please reply to this message or contact the journal office at plosone@plos.org. When you're ready to submit your revision, log on to https://www.editorialmanager.com/pone/ and select the 'Submissions Needing Revision' folder to locate your manuscript file.

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• A rebuttal letter that responds to each point raised by the academic editor and reviewer(s). You should upload this letter as a separate file labeled 'Response to Reviewers'.
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• An unmarked version of your revised paper without tracked changes. You should upload this as a separate file labeled 'Manuscript'.

If you would like to make changes to your financial disclosure, please include your updated statement in your cover letter. Guidelines for resubmitting your figure files are available below the reviewer comments at the end of this letter.

If applicable, we recommend that you deposit your laboratory protocols in protocols.io to enhance the reproducibility of your results. Protocols.io assigns your protocol its own identifier (DOI) so that it can be cited independently in the future. For instructions see: https://journals.plos.org/plosone/s/submission-guidelines#loc-laboratory-protocols. Additionally, PLOS ONE offers an option for publishing peer-reviewed Lab Protocol articles, which describe protocols hosted on protocols.io. Read more information on sharing protocols at https://plos.org/protocols?utm_medium=editorial-email&utm_source=authorletters&utm_campaign=protocols.

We look forward to receiving your revised manuscript.

Kind regards,

Mohammed Al-Mahish

Academic Editor

PLOS ONE

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Reviewers' comments:

Reviewer's Responses to Questions

Comments to the Author

1. If the authors have adequately addressed your comments raised in a previous round of review and you feel that this manuscript is now acceptable for publication, you may indicate that here to bypass the “Comments to the Author” section, enter your conflict of interest statement in the “Confidential to Editor” section, and submit your "Accept" recommendation.

Reviewer #1: (No Response)

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2. Is the manuscript technically sound, and do the data support the conclusions?

The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented.

Reviewer #1: Yes

**********

3. Has the statistical analysis been performed appropriately and rigorously?

Reviewer #1: Yes

**********

4. Have the authors made all data underlying the findings in their manuscript fully available?

The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified.

Reviewer #1: No

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5. Is the manuscript presented in an intelligible fashion and written in standard English?

PLOS ONE does not copyedit accepted manuscripts, so the language in submitted articles must be clear, correct, and unambiguous. Any typographical or grammatical errors should be corrected at revision, so please note any specific errors here.

Reviewer #1: Yes

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6. Review Comments to the Author

Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters)

Reviewer #1: The authors have done a great job addressing most of my previous comments. For this round, I only have concerns about the prices they use for estimation. In the revised draft, they use unit values as individual prices, which is worrisome. In estimating demand system, you want to avoid using unit values as possible as you can since they have quality effects embedded in them and thus are correlated with preferences making them endogenous. For example, for individuals who tend to buy premium RTD SSBs versus others who buy average brands, the former would pay much higher unit values than the latter for the same amount of SSBs consumed, reflecting individual's preferences. Please see Nelson (1991) and Nelson (1990) that discuss the issue rather well.

One approach you might want to consider in order to fix this issue is to look at those sub-products within the aggregate group of RTD SSBs, such as sodas, soft drinks, nectars etc. Calculate unit values for these sub-products and use these sub-group unit values to construct a Laspeyres or Paasche type index for the aggregate group RTD SSBs. The idea is to start with the most elementary prices in the data set and construct the indexes for the aggregates. It will be less of a problem if you start with the disaggregate unit values and construct index numbers based on them the aggregate group of RTD SSBs.

Reference:

Nelson, J. A. (1991). Quality variation and quantity aggregation in consumer demand for food. American Journal of Agricultural Economics, 73(4), 1204-1212.

Nelson, J. A. (1990). Quantity aggregation in consumer demand analysis when physical quantities are observed. The Review of Economics and Statistics, 153-156.

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Reviewer #1: No

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PONE-D-23-03690R2Price elasticity of demand for ready-to-drink sugar-sweetened beverages in BrazilPLOS ONE

Dear Dr. Santiago,

Thank you for submitting your manuscript to PLOS ONE. After careful consideration, we feel that it has merit but does not fully meet PLOS ONE’s publication criteria as it currently stands. Therefore, we invite you to submit a revised version of the manuscript that addresses the points raised during the review process.

ACADEMIC EDITOR:Please discuss the limitation of your study in the conclusion by focusing on the weaknesses of your study such as positive own price elasticity of some items, low R-squared value…etc. Also, provide suggestions and recommendation for future research.

Please submit your revised manuscript by Oct 14 2023 11:59PM. If you will need more time than this to complete your revisions, please reply to this message or contact the journal office at plosone@plos.org. When you're ready to submit your revision, log on to https://www.editorialmanager.com/pone/ and select the 'Submissions Needing Revision' folder to locate your manuscript file.

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If you would like to make changes to your financial disclosure, please include your updated statement in your cover letter. Guidelines for resubmitting your figure files are available below the reviewer comments at the end of this letter.

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We look forward to receiving your revised manuscript.

Kind regards,

Mohammed Al-Mahish, Ph.D.

Academic Editor

PLOS ONE

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Price elasticity of demand for ready-to-drink sugar-sweetened beverages in Brazil

PONE-D-23-03690R3

Dear Dr. Santiago,

We’re pleased to inform you that your manuscript has been judged scientifically suitable for publication and will be formally accepted for publication once it meets all outstanding technical requirements.

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Kind regards,

Mohammed Al-Mahish, Ph.D.

Academic Editor

PLOS ONE

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