Thursday, January 21, 2010

All Your Calories Are Belong To Us

In their paper, Calorie Posting in Chain Restaurants (National Bureau of Economic Research Working Paper 15648 – subscription only), authors Bryan Bollinger, Phillip Leslie, and Alan Sorensen measure the effect of posting calorie information in Starbucks stores on calorie consumption and effect on sales.

We find that mandatory calorie posting does influence consumer behavior at Starbucks, causing average calories per transaction to decrease by 6% (from 247 to 232 calories per transaction).

The effects are long lasting: the calorie reduction in NYC persists for the entire period of our data, which extends 10 months after the calorie posting commenced. Almost all of the effect is related to food purchases—average beverage calories per transaction did not substantially change, while average food calories per transaction fell by 14% (equal to 14 calories per transaction on average). Three quarters (10 calories) of the reduction in calories per transaction is due to consumers buying fewer items, and one quarter (4 calories) of the effect is due to consumers substituting towards lower calorie items.

We find that calorie posting did not cause any statistically significant change in Starbucks revenue overall. Interestingly, we estimate that revenue actually increased by 3% at Starbucks stores located within 100 meters of a Dunkin Donuts (an important competitor to Starbucks in NYC). Hence, there is evidence that calorie posting may have caused some consumers to substitute away from Dunkin Donuts toward Starbucks. The fact that Starbucks’ profitability is unaffected by calorie posting is consistent with the finding that consumers’ beverage choices are unchanged, which is of course Starbucks’ core business.

Starbucks can be expected to use this information to create more tasteless, doughy, sugar free, 100 calorie hockey pucks, placing them next to the $1.95 a piece, 480 calorie, 23 grams of fat Top Pot donuts, and charge $2.25 for peace of mind to suckers ordering 580 calorie white chocolate mocha.

But really, what are the expected long term benefits of the state bothering us all with more tiny fonts to decipher as we rush to work or the big comfy chair in the corner?

The authors conclude:

Calorie reductions on the order of 6% at chain restaurants would yield only modest decreases in body weight, even if those reductions were not offset by increased caloric intake at other meals.

However, as far as regulatory policies go, the costs of calorie posting are very low—so even these small benefits could outweigh the costs. Moreover, the long-run effects of calorie posting are potentially more dramatic. At the margin, calorie posting should encourage restaurants to innovate and offer low-calorie items. We document some preliminary evidence that this is happening in NYC. Also, there may be public education benefits from the policy: consumers’ exposure to calorie information may make them generally more aware and attentive to the nutritional value of the foods they eat.

What's so absurd about this entire study is the charade that people don't know that the donut they are eating is actually a pretty looking wad of lard with nice colored sprinkles on top.

It is none of the government's business what we choose to eat or why we choose to eat it or what the calorie count of what we choose to eat is or of the food we prepare using still legal ingredients in doing so. This is a tiresome rant but it must be said over and over again. In the study above, we have the functionaries, the putative scientists of the nanny state, gathering their bits and pieces of evidences as to why their small intrusions into our lives are completely harmless and have some real marginal benefits that really don't cost anything and may, may, may do this, that and the other thing to allow us to live long enough to prove the statists' point that we are better off living under their rule than under our own individual direction, concern, and yes, caloric ignorance.

On SBD's recent sojourn to Manhattan, every food shelf, every pizza pie, every donut tray and bagel bin, every knish pan and cannoli plate, even every hot dog and falaffel cart on the most foul and disgusting sewer sweat soaked street corner, had an absurd little card next to it announcing the calorie count of the defendant. In every case, it's a cacophonous riot of useless information that gums up the wheels of commerce, and causes nothing but increased guilt and angst in people simply trying to go about their lives. Why a free people puts up with these intrusions by government remains a continuing mystery. Perhaps, over time, these signs will be as well noticed and effective at moderating behavior as the 55 MPH speed limit signs have been in checking people's behavior on the road. Yes, driving too fast can kill you and others but eating too much has yet to be a demonstrated risk to other people. At present, though, you can be ticketed for disobeying the speed limit sign; it is only a matter of time before we are ticketed for violating a calorie count.

Eat 'em' while ya got 'em, folks.