The price elasticity of demand is a measure of the relationship between a change in the quantity demanded of a particular good and change in its price. The elasticity of demand for soft drink products and Coke, as well as snack items, is still highly prevalent in Mexico. The 10% reduction of particular soft drink items will be increased via other drink and snack sources. Similar situations can be seen in the US like the situation being discussed. Cigarette prices have gone up over the years as the fight to reduce smoking continues, as well as school lunches changing into a healthier route to reduce obesity. These are changes that the government has been making to change into a more healthy society. If the tax hike succeeds, it would help Mexico with education and providing a healthier choice within schools. In the article, it states that the revenue from the tax is supposed to support water fountains within the schools and fund health education programs. In this case, it would be a win for the government although the health care industry would not profit as much. There is a possibility that for those refraining from the purchase of soft drink and unhealthy snacks, more income would be spent on food and drink items with higher nutritional values. The equivalent of the seven cent tax per item will do little to deter those from obtaining the product if they so desire it.
It appears that those that want soda will find ways to get it. According to the article, some people have already done that by crossing the border to buy their soda. This will eventually effect the Mexican economy because the money is no longer going into the country as it should. Crossing the border is dangerous (not unless they do it right and legal). But crossing the border into the United States can help them with being able to buy more drinks and snacks because they are cheaper. This will not benefit Mexico because families will find it hard to cope with the higher price because their pay is not as high as it is in the United States. For a family that lives in a smaller town with a very limited income, seven cents is more likely to affect their buying choices. Other implications could be layoffs due to the inconsistent demand for soft drinks and sugary snacks at their respective manufacturers. The entire concept to propose a higher tax to curb excessive intake and reduce health risks may only serve to create more problems.

Replogle, J. (2014). Mexico's soda tax is starting to change some habits, say health advocates. Retrieved fromhttp://www.pri.org