How expensive is a can of Coke?

Saturday October 21, 2017

The nominal price of a can of coke is a few cents. In actuality, it costs much more.

The scientific consensus is that dietary sugar is a major contributor to type 2 diabetes, obesity, hypertension, and related diseases - collectively called metabolic syndrome. Soda is the number one contributor to dietary sugar in the United States. The only people who seem to disagree are the American Beverage Association. Sound like the Tobacco lobby?

If this societal cost was priced in - how much would a can of coke cost?

  1. Metabolic syndrome covers a large number of related diseases, but let’s focus on diabetes to start. One research group estimates the cost of an individual case of diabetes as $85,200. Keep in mind there are many more diseases counted in metabolic syndrome, but let’s start here.

  2. One serving (250mL ≈ 8.4oz) of soda a day over a decade increases the likelihood of developing diabetes by 18%. Factoring in the base rate of lifetime chance of getting diabetes of 35% gives us 0.063 marginal cases of diabetes for every soda drinker. Study

  3. Multiply the cost of one case of diabetes ($85,200) by 0.063, and divide by the number of 12oz cans consumed over that decade (2555) gives $2.10.

Every time you drink a $1 can of coke, don’t forget to tack on $2.10* of medical costs. (At least!) Keep in mind the true costs are even higher - this cost only factors in diabetes and not all of metabolic syndrome.

UPDATE: I was originally overzealous here by not factoring in the base rate (35%) of developing diabetes, and thus quoted $6. H/T to Johnny Winston to pointing this out. That said, diabetes is only one of the conditions of metabolic syndrome, so I'm still happy with $6.00 as an estimate of total healthcare costs for every soda consumed.

The good news is that soda consumption is at a 31-year low. We can see the positive effects of this shift in the slowing rates of adult obesity and decreasing rates of childhood obesity. Link

Still, we have a long way to go. In the United States, one in three adults, and one in six children, are not just overweight - they are obese. The healthcare costs of metabolic syndrome are staggering: roughly $1T, or 30-40% of national healthcare spend. I’d rest much better at night if there was a $6 tax on every can of coke or a cigarette-style warning labels on every high sugar food item. Better nutritional guidelines wouldn’t hurt either. Obesity is the biggest public health (and public finance) issue of our time, and it’s got a simple solution: cut out the sugar.


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