负外部性是指第三方因消费者与生产者或供应商之间发生的交易而产生的成本。生产者和消费者作为第一方和第二方可能无法吸收或抵消交易成本，这就被推给了第三方。外部性一般被称为溢出效应，负外部性被称为与第三方所承担的效应相关的外部成本(Willinger and Ziegelmeyer, 1999)。本文所讨论的负外部性是由于含糖饮料给国家带来的成本。本文试图通过数据和经济模型来理解，如果肥胖是由市场在控制好产品方面的失败导致的，以及使用糖税是否有助于停止控制负外部性。
A negative externality is defined as the cost that is incurred by third parties as the result of the transaction which is happening between a consumer and producer or suppliers. The producer and the consumer as first and second parties might not be able to absorb or offset the costs of transaction and this gets pushed onto the third party. Externalities in general are called spillover effects and negative externality is called the external costs associated with the effect that is borne by the third party (Willinger and Ziegelmeyer, 1999). The negative externality that is being discussed in this research essay is that of the costs to the country occurring on account of sugary drinks. The essay attempts to understand by means of data and economic models, if obesity results from a market failure in controlling good production, and whether the use of a sugar tax would be helpful in stopping controlling the negative externalities.
In terms of costs to the country, the overweight and the obesity (high BMI) issue is seen to be the second highest contribution to the country’s economic burden of disease. The first is dietary risks and the third is smoking risks. As of 2008, with respect to obesity it was noticed that around 242,033 Australians had type 2 diabetes because of being obese, around 644,843 Australians had some form of cardiovascular disease because of being obese, around 422,274 Australians had osteoarthritis and 30,127 Australians had either a colorectal cancer or some form of breast cancer, uterine issues and more because of being obese (Australian Government, 2009). These in turn increase health care costs for the country, so there is a strong need to address the issue of obesity from a larger scale.
In terms of children it is noticed that there are around 1 in 4 children who are obese and that makes an average of 25 percent of the Australian children under the obese category. Consumers might turn to much more economical and healthier alternatives because of the sugar tax and this would hence result in the decrease of obesity that is triggered by excessive sugar consumption.