Do You Want Fries with That? An Exploration of Serving Size, Social Welfare, and Our Waistlines

Abstract:     
In the debate over increasing obesity rates, fingers are often pointed at big food and their marketing practices. It is noted that restaurant meals are often larger than home-cooked meals and that portion sizes in restaurants have dramatically increased over the past few years. We investigate the issue by considering socially optimal - rather than decentralized profit maximizing - portions in restaurants to see whether welfare maximizing strategies may also be waistline-increasing. We demonstrate that socially optimal restaurant meals are larger in size than average home-cooked meals and, while many agents chose to super-size, the option of super-sizing actually alleviates the size discrepancy between home-cooked and restaurant meals. Moreover, socially optimal portion sizes at home and in restaurants increase with relative reductions in the marginal costs and/or relative increases in the fixed costs of meal preparation. Given this cost structure, when offered fries, a greater proportion of the population will answer with an enthusiastic yes!

Number of Pages in PDF File: 19

Keywords: Obesity, Overweightness, Economics of Obesity, Fast Food, Big Food, Consumption Choices

JEL Classification: I10, D11

working papers series