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

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Abstract

Given increasing obesity rates, fingers are often pointed at “big food” and their marketing practices. Restaurant meals are indeed larger than home-cooked meals, and portion sizes have increased. We consider constrained “socially optimal”—rather than decentralized profit-maximizing—portions to see whether welfare maximizing strategies may also be waistline-increasing. We demonstrate that socially optimal restaurant meals are larger than average home-cooked meals, yet the choice to “super-size” alleviates the size discrepancy. Moreover, 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. (JEL I10, D11)

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