April 12, 2013
Proponents for stricter gun control regulations should take a lesson from new research conducted in the wake of Mayor Bloomberg’s failed attempt to ban the sale of sodas in containers larger than 16 ounces. When faced with restrictive regulatory actions, the average American will find a way to circumvent the system.
A month after New York City’s health department was forced to shut down their campaign to restrict soda sizes, a new report published at PLOS ONE takes a serious look at the hidden hazards that might have occurred had Bloomberg’s “arbitrary and capricious” plan been allowed to succeed.
The PLOS ONE report shows that had the ban been allowed to stand, Americans would have consumed even more sugary soft drinks, and vendors and manufacturers would have seen increased sales and profits.
The PLOS ONE researchers recruited 100 undergrads from UC San Diego and set up a mock concession stand where they offered popcorn, pizza and a variety of beverage choices, including single-serving cups and “bundles” of cups.
One concession stand offered a full-service menu with single-serving cups priced at 16 ounces for $1.59, 24 ounces for $1.79, and 32 ounces for $1.99. Another concession stand offered a single 16-ounce soda for $1.59, or two 12-ounce sodas for $1.79, or two 16-ounce sodas for $1.99.
The study found that participants bought significantly more ounces of sodas with bundles than with varying-sized drinks, a “potential unintended consequence” that proponents hadn’t considered. Even though the price is the same for 32 ounces either way you look at it, participants were more likely to buy bundles sodas than they were the single-servings.
Proponents of the soda ban have been assuming that restaurants and vendors will simply eliminate anything larger than a 16-ounce size cup from their menus. But The PLOS ONE study shows that retailers can actually increase revenues by bundling their servings. The average revenue on a single 16-ounce serving of soda is $1.02, but when the average revenue on drink bundles is $1.69, even when you consider that cost of the extra cup, lid and straw.
The PLOS ONE study concluded that “businesses have a strong incentive to offer bundles of soda when drink size is limited. Restricting larger-sized drinks may have the unintended consequence of increasing soda consumption rather than decreasing it.”
David Just, a professor of behavioral economics at Cornell University’s Dyson School of Applied Economics and Management, said “the findings fit with typical buyer and seller behavior, and underscore the hidden hazards of regulatory actions that may be seen by consumers as restrictive.”
“Most people getting ready to buy soda will go for the regular size,” said Just, who was not involved in the study. But when people want a large soda and they are prevented from buying it, he said, “they’re going to display what we call reactance — a rebelliousness, a determination to circumvent this policy, an attitude of ‘I’ll show them.’ And the people selling the soda are all too willing to comply.”
On a larger scale, the same thing happened with Obama’s 62-cent-a-pack cigarette tax that he passed in 2009. To circumvent the system, manufacturers simply focused their marketing efforts on large cigars and loose tobacco, products that were taxed at a substantially lower rate. The result? In 2011 there was a 0.8 percent decrease in cigarette consumption and a 123 percent increase in consumption of non-cigarette tobacco products.
Any of the proposed gun control regulations currently under consideration will have the same effect. Proponents are simply assuming that manufacturers will take any banned weapons off the market and be only too willing to suffer the loss of sales, and that the average American will be happy to comply with any and all restrictions.
But what they fail to realize is that it’s human nature to want to circumvent the system, especially when, as Just points out, we’re “faced with regulatory actions that may be seen by consumers as restrictive.” The American people will still want their guns, and the people selling the guns will be only too willing to comply.
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