The Economics of Michael Bloomberg’s Large-Soda Ban

September 13, 2012 — In a decision that cheered public health advocates concerned about the obesity epidemic and angered others, the New York City Board of Health passed a rule banning super-sized, sugary drinks at restaurants, concession stands and other eateries today. Liberals and conservatives, Republicans and Democrats, and industry groups like the American Beverage Association have all criticized this ban, many calling it a “nanny-state” mentality. Despite the criticism, will the ban work?
The ban will begin in March 2013 and will prohibit restaurants, delis, sports arenas, movie theaters, and food carts from selling any soft drinks larger than sixteen ounces. In an insightful article in The New Yorker, James Surowiecki examines aspects of the ban, noting that New York City’s soda consumers are about to become the subjects of a social-science experiment designed to reshape their behavior and desires. Will Mayor Bloomberg’s shrewd use of an economic disadvantage to buying super-sized beverages – paying for two drinks – alter purchases? Will this new rule flip soda buying decision-making? If the largest soda you can order is sixteen ounces, a can of Coke may seem like more than enough.
Read The New Yorker article on September 13, 2012 here.