South By North Strategies, Ltd.

James Surowiecki of The New Yorker consider the economic logic behind banning supersized soft drinks in New York City.

Many economists would say that, if we want to discourage soda consumption, taxing it—the way we do alcohol and tobacco—would be more efficient than a ban. Some European countries do have such taxes, but the idea has been a political non-starter in New York. In any case, perhaps the most cunning aspect of Bloomberg’s proposed ban is that it would function as a kind of stealth tax on consumption, while leaving average-sized sodas untouched. Currently, on a per-ounce basis, large drinks are much cheaper than smaller ones—which encourages people to supersize. The soda ban should shift this. Two sixteen-ounce servings are bound to be more expensive than one thirty-two-ounce serving, which creates another disincentive to drink more.
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If all this sounds as if New York’s soda consumers were about to become the subjects of an elaborate social-science experiment designed to reshape their behavior and desires, well, that’s kind of true. But then we’ve been the subject of just such an experiment, run by beverage and fast-food companies, for the past forty years. If Bloomberg has his way, we may start feeling like we’re white rats in a maze, but at least there’s a good chance we’ll be thinner rats.