Containing big soda: countering inducements to buy large-size sugary drinks

Health concerns about overconsumption of large portions apply to a wide range of highly calorific foods and drinks. Yet, amongst all products, sugar-sweetened soft drinks and especially sugared soda are the ones which seem to raise the most ire because they contain little or no nutritional value beyond their sugar content and because of the way that vendors encourage excessive consumption by pricing jumbo-size portions to look like bargains while making smaller portions appear overpriced. This paper considers the logic of such extreme value size pricing and reveals why this marketing practice can harm economic welfare beyond public health concerns. The paper shows why policy interventions, including portion cap rules and soda taxes, seeking to reduce portion sizes and curb the consumption of large-size sugary drinks might fail when they do not fully take into account or appreciate the strategic responses that vendors might adopt to retain value size pricing.