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A few theories on why they got sooooo big. by Steven E. Landsburg |
| Published in Slate
Magazine, http://slate.msn.com/Economics/00-04-26/Economics.asp.
Posted Wednesday, April 26, 2000, at 4:00 p.m. PT |
| For the past three decades, only one economic variable has exhibited strong steady growth year in and year out. I refer, of course, to the size of shopping carts. According to the grocery store managers I just spoke to, today's average cart is almost three times as large as its 1975 counterpart. That's remarkable because by 1975 the growth spurt had already been underway and apparent to economists for several years. |
| Although I can't conjure a citation from NEXIS or the Web, Ralph Nader is said to be one of the first to notice the growing-shopping-cart phenomenon. He is said to have offered it as a prime example of how consumers are manipulated by unscrupulous capitalists: Bigger carts were designed to shame consumers into bigger purchases. Even if we accept the dubious presumption that a normal shopper would be embarrassed to have the neighbors see him roll up to the checkout line with a half-full cart, this explanation lacks fundamental logic. That's because it's a story about why shopping carts are big, not a story about why they're getting bigger. As soon as some clever grocer figures out that big carts mean big urchases, carts should immediately get bigger—and stay that way. |
| Shortly after the big cart hypothesis surfaced in the mid-'70s, the topic started showing up on exams in the economics department at the University of Chicago, usually attached to a question such as, "Explain why Mr. Nader can't be right, and offer an alternative explanation that can be right." The answer the professors had in mind was this: Until recently (or what was then recently), most households had a member (usually called the "wife") whose full-time job description included a weekly shopping trip. The entry of women into the work force changed all that, so shopping trips became less frequent and shoppers wanted to buy more per trip. |
| There's an old joke about the graduate student who discovers
that the exam questions are the same every year but that the answers are
always different. As the shopping cart question grew to legendary status,
students began competing to offer new and more creative solutions. Nowadays
I teach a freshman honors seminar in economics, and I often throw the question
out to my class on the first day. To my never-ending surprise and delight,
I get at least one new and thoughtful answer every time I do this. For
example: People are a lot wealthier now than they were 30 years ago. That
means they are willing to pay higher prices for the luxury of shopping
in wide aisles. (Wide aisles drive up prices because they require a bigger
investment in land.) Once you've got the wide aisles, you might as well
have the bigger carts. (Actually, this one came not from a student, but
from my father—thanks, Dad.)
Or: Houses are a lot bigger now than they were 30 years ago. That means more space in the pantry, so people can buy more food on each trip. |
| O r: Most people used to shop with cash, and their purchases were limited by the amount of cash they were willing to carry. As credit cards became ubiquitous, more and more shoppers were willing to fill up a big cart. This one is testable: It predicts that stores will offer a mix of small carts (for cash shoppers) and large carts (for credit card shoppers) and that the proportion of large carts should grow over the years. By contrast, some of the other theories predict a steady growth in the size of all carts. |
| Or: Now that people are richer, they're more likely to cook several dishes for the same meal. Or: Now that people are busier, they're more likely to eat separately rather than as a family, and hence to cook more meals per household per day. (Of course, this also cuts the other way—busier families are more likely to eat at restaurants.) |
| Or: Technological improvements have made it easier for each family member to have the food he prefers. Frozen dinners are a lot better now than they used to be, so a family of five is more likely than before to eat five frozen dinners than to share a single meatloaf. Sometimes even a minor innovation can have a huge effect on purchasing habits. When packaged pies were available only in 14-inch sizes, apple was the best-selling flavor. When 7-inch pies became available, apple immediately fell to somewhere around fifth place. That's because in the old days, the whole family had to agree on a pie, and apple was everyone's second choice. Now that everyone can have his own pie, very few choose apple. |
| One reason I like throwing this problem out to the classroom is that it gives us a chance to talk about the difference between a good and a bad theory. A good theory doesn't just explain why shopping carts grow; it has to explain why they've grown at this particular time. Changes in income, changes in the labor-force participation of women, changes in payment habits, and changes in technology are all plausible starting points for a good theory. By contrast, a theory that says shopping carts are large because people like to have a lot of vegetables is no good unless you explain why people have gradually come to like vegetables more over this particular time period—and why people who are buying more vegetables would not buy correspondingly less meat. A theory that blames the whole thing on more effective advertising, creating an army of zombielike consumers who must have their morning Trix, is no good unless it explains why Trix don't just replace corn flakes. |
| I once did a radio call-in show in Pittsburgh called "Economist With Attitude." I asked the shopping cart question, callers offered solutions, and there was a prize for the one I disliked the least. I am dismayed to report that I don't remember the prize-winning entry. Is there a reader from Pittsburgh who can remind me? Better yet, if you have an explanation that should have won, send it to me. I'll append this column with the best explanations. |
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The readers share their theories on why carts got so big. by Steven E. Landsburg |
| Published in Slate
Magazine, http://slate.msn.com/Economics/00-05-30/Economics.asp
Posted Tuesday, May 30, 2000, at 10:00 a.m. PT |
| Not too many years ago, an early frost wiped out half the Florida orange crop. There was no need to weep for the orange growers. Prices more than doubled, and revenues hit an all-time high. |
| Network news commentators cried, "A-ha! Evidence of monopoly power in the orange groves!" Economists cried, "A-ha! Evidence of economic illiteracy among network news commentators!" Not only did the commentators have it wrong; they had it exactly backward: The dramatic price increase actually proved the absence of monopoly power. After all, it had taught us two lessons: First, interruptions in supply are good for orange growers; and second, it takes a frost to interrupt supply. A monopolist wouldn't have waited for a frost; he'd have cut down trees or thrown away oranges long before the weather went bad. |
| The commentators went astray because they asked themselves the wrong question. They asked, "Why are orange prices high?" when they should have been asking, "Why did orange prices rise?" A uniformly high price is evidence of a monopoly power, but a suddenly rising price is something very different. |
| To put this another way, you can ask yourself, "Why were prices so much higher after the frost?" or you can ask yourself, "Why were prices so much lower before the frost?" Except for the wording, those questions are identical. If your theory fails to address the second question, then it fails to address the first. |
| Which brings me back to the great shopping-cart controversy. Last month in this space, I asked why shopping carts have gotten so much bigger over the past 30 years and solicited the speculations and theories of Slate readers. The e-mail response has been overwhelming. I'm trying to read all of the e-mails, but as they continue to trickle in, I keep falling farther behind. For the moment, I'm concentrating on the short e-mails. Anything longer than about 80 lines—and anything, regardless of length, that is littered with html code—is sitting on the bottom of the virtual pile. |
| With shopping carts, as with orange prices, the problem is to explain not the size but the change in size. The question is not why carts are big but why they've gotten bigger. If your theory doesn't explain why carts were so much smaller in the past, then it can't explain why carts are so much bigger in the present. |
| So all theories about the advantages of large carts—room for your purse, room for your kids, room for your shopping list—founder unless they are accompanied by explanations of why all that extra room is more valuable this year than in 1970. That's why I liked the e-mail from Susan Provan, who argues that room for the kids is more important in an era with more single mothers. |
| Quite a few of my correspondents pointed to the fact that supermarkets now carry televisions, VCRs, garbage cans, and other non-food items. I like this story, but it's incomplete without an auxiliary story about why the mix of supermarket items has expanded. The answer, I suspect, is that working women don't have the time to shop at six different stores, and there are a lot more working women these days—so it makes sense for one store to offer everything from pet food to lawn furniture. |
| Several readers pointed out that shoppers today are more likely to be driving, and those who are driving are more likely to be driving SUVs and minivans, which have a lot more room for shopping bags. I received particularly thoughtful e-mails on this point from both Pamela Nadash and D. Gregg Doyle, who offers this observation: More cars require bigger parking lots. Bigger parking lots require grocery stores to locate on the outskirts of town where land is cheaper. Faraway grocery stores mean longer trips. Longer trips inspire shoppers to stock up and shop less often. |
| uite a few readers asked why I don't just call cart manufacturers and ask why they're making carts bigger these days. But I doubt there's much to be learned from that exercise. I'm sure the manufacturers are aware that their customers want bigger carts, but I'm not sure they'd know why their customers want bigger carts. On the other hand—if there's a cart manufacturer out there with some special insight, I'll be thrilled to hear from him. |
| If I had to give a prize for the best e-mail, it would go to Kevin Postelwaite, who sent me 11 theories, including these: Maybe shopping carts have gotten sturdier or harder to steal, making large carts a better investment for the store. Maybe people waste a lot more food today (because we're richer now). Maybe (again because we're richer) people are substituting purchased goods for unpurchased goods—soda and juice instead of tap water, disposable diapers instead of reusable cloth diapers. Maybe the technology of scanners has something to do with it. Maybe people used to take their kids shopping and had them push multiple carts; now that the kids are in day care, the lone adult shopper needs a single mega-cart. |
| Thus Susan Provan's theory—that people need bigger carts because they're lugging around more kids—meets Kevin Postelwaite's theory—that people need bigger carts because they're lugging around fewer kids! |
| Along with all these new theories, I got some cogent objections to the old ones. I argued last month that today's credit-card shoppers can buy more per trip than the cash-constrained customers of the past. My colleague Mark Bils thinks the opposite is true. In the old days, you had to visit first the bank and then the grocery store. That was so inconvenient, says Mark, that you'd do it as infrequently as possible—making huge withdrawals and huge shopping trips. With credit cards, you can pop into the grocery store for eggs and milk whenever you need them. |
| I'm sure there are more gems among the hundreds of e-mails I have yet to read. This kind of seemingly frivolous exercise is more instructive than you might expect; people who have thought hard about shopping carts won't say foolish things about monopoly pricing. But as for me, I'm moving on to bigger issues. I just did an interview on an Australian radio station and got asked what's been happening to the size of trash cans. |