For a Few Cents More: Why Supersize Unhealthy Food?

Health-care experts believe that increases in portion sizes served by food vendors contribute to the obesity epidemic. This paper shows that food vendors can profit handsomely by using super sizing strategies where regular portion sizes are priced sufficiently high to discourage price-conscious consumers from selecting them, and the prices for enlarging food portions are set so low that these customers are tempted to order the larger portion sizes and overeat. Setting aside the impact of obesity on health-care costs, we show that using supersizing to steer customers toward consuming excessive amounts of food can destroy value from a social perspective; thus this social value destruction trap adds another justification for pressuring food vendors to reduce supersizing for unhealthy food. As a public policy response, we consider how "moderating policies" may counter these effects through measures designed specifically to encourage eating in moderation by applying supersizing bans, taxes, and warnings.