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Super Sized Sodas

Jun 3, 2012 • Behavioral Economics, Businesses, Demand, Supply, and Markets, Economic Debates, Government, Regulation, Thinking Economically, Uncategorized • 190 Views    No Comments

Given a huge tub of stale popcorn, people eat it.

In a 2005 study, when 158 Philadelphia moviegoers received either 14-day old or freshly popped popcorn in a huge tub or a medium size container, those with the big bucket ate more. A lot more… 33% extra if they disliked the popcorn and 45% if they liked it.

The conclusion? Even when we dislike the food, portion size impacts intake because it conveys the appropriate amount to ingest.

I don’t know whether NYC Mayor Mike Bloomberg knew about the popcorn study but he certainly agrees with its implications. He just announced that he would propose to the Board of Health on June 12 that restaurants, delis, stadiums, street carts, movie theaters–any vendor the city regulates–cannot sell larger than 16-ounce sugary drink servings. If approved, there will be a 3-month comment period, a 6-month waiting period, and then the regulation would be implemented during March 2013. Sodas sold at grocery and convenience stores, drinks that are more than 50% dairy, diet sodas, coffee, are among the drinks that are not included.

There are so many economic issues:

  • Is obesity a negative externality that society has the right to “regulate?” Saying that obesity costs the city $4 billion, Mayor Bloomberg identified (and was challenged about validity of the statistic) one externality.
  • Is individual liberty the opportunity cost of the mandate? Purchased by its opponents, there was a full page Sunday NY Times ad picturing Mayor Bloomberg dressed as a nanny.
  • Which unintended consequences will be created by the regulation’s incentives?
  • Will government distort market driven demand and supply?
  • Should government be larger or smaller?

This article from Cornell has additional details about the popcorn study and here and here are more facts about the mayor’s proposal.

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