Academic journal article Yale Economic Review

Coffee and Calorie Posting:

Academic journal article Yale Economic Review

Coffee and Calorie Posting:

Article excerpt

MENU BOARDS IN Starbucks coffee shops around the country display essential information: how to order a skinny grande caramel frappuccino, (light whip, please). In New York City, these menus now also serve up the drinks' calorie information. Starbucks began posting this information in April of 2008, to satisfy a new municipal law requiring all restaurant chains to post calorie information as prominently as price. The regulation seeks to improve consumer information at the point of sale, so that they are better informed about the health effects of their purchases. With nationwide concerns about obesity, this type of law certainly sounds reasonable.

But what about the economic impact of these calorie counts? Bryan Bollinger, Philip Leslie, and Alan Sorensen are researchers at Stanford University who investigated the economic effect of calorie posting in Starbucks coffee shops. The researchers analyzed a year's worth of Starbucks transactions in New York City before and after the implementation of the new menus. For comparative purposes, the researchers also examined the transaction information of Starbucks coffee shops in Boston and Philadelphia. These cities did not have mandatory calorie posting laws at the time of the study.

Perhaps unsurprisingly, the authors found that information at the point-of-sale does affect consumer decisions. Their study found that with the new menus, the average number of calories per transaction decreased 6%, from 247 to 232 calories. However, changes in purchases of food items, rather than Starbucks beverages, accounted for most of the decrease. More specifically, customers had a tendency to buy fewer food items than to substitute with lower-calorie items.

The researchers were also able to make insights about individual behavior. This was possible through data from Starbucks cards, which track the transactions of specific individuals. Granted, these individuals are not representative of all Starbucks clientele, because they tend to be more loyal than the average customer. …

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