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A public policy blog from AEI
The purported goal behind the ban is to reduce obesity. But would restricting the size of sodas really make a difference? New research suggests such a prohibition may be counterproductive, encouraging citizens to consume more soda than they would absent the restriction.
In a new study published on PLOS ONE Journal, authors Brent M. Wilson, Stephanie Stolarz-Fantino, and Edmund Fantino presented participants with three menus. The first, the “unregulated” menu, offered 16, 24, and 32 oz sodas for $1.59, $1.79, and $1.99, respectively (prices based on McDonald’s menu). The “bundle” menu offered one 16 oz, two 12 oz, or two 16 oz sodas for the same prices. Finally, the “no bundle” menu presented only a 16 oz soda, for $1.59.
The results, as you can see in the chart below: “Participants bought significantly more ounces of soda with bundles than with varying-sized drinks.”
This is a big problem for Nanny State crusaders because the NYC soda ban doesn’t forbid bundles. In fact, Mayor Bloomberg is in favor of bundles, stating on a recent Meet the Press appearance that:
All we’re saying is, we want to show you just how big the cup is. If you want 32 ounces, take two cups to your seat. If you want 64, carry four. But our hope is, if you only take one, you won’t go back.
Bloomberg has often made this pro-bundling argument, revealing just how little research he and his Board of Health did before instituting the ban. Maybe instead of “hoping” consumers won’t buy multiple, smaller sodas, they should have actually researched consumer behavior as Wilson et all did.
The reality is that bundling increases the amount of soda that consumers will buy. Only when they were limited to one choice and one choice only, the 16 oz soda, did consumers purchase less volume.
Moreover, the study showed that it’s also in the business’s interest to offer bundles, since doing so results in the greatest amount of revenue for them:
Bloomberg’s plan as originally outlined might well produce the opposite results of his stated intentions. A handy lesson in how government action often produces unintended and unwanted consequences.
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