Super Size May Not Be Such A Good Deal - home economics - Brief Article

Consumers who buy "economy-size" packages thinking that they are saving money may be in for a rude awakening. A Purdue University, West Lafayette, Ind., study found that consumers have become so convinced larger sizes mean cheaper prices that they don't bother to compare the per-ounce costs. Certain products at the grocery store prey on this inattention by charging more per ounce--sometimes up to twice as much--for the larger sizes.

Economists call this practice "surcharging." James Binkley, professor of agricultural economics, points out that it happens frequently in grocery stores. "We don't really know how many products have a surcharge. It happens with flour, and I've seen it with toilet paper, canned chili, peanut butter, and tomato products such as ketchup."

Binkley and John Bejnarowicz, a former graduate student at Purdue, investigated whether consumers were simply willing to pay more for larger sizes for extra convenience or whether they were unaware of the actual price per ounce or unit. Tuna was selected because surveys consistently found that it has surcharges on larger sizes. For example, two six-ounce cans of tuna are usually cheaper than one 12-ounce can. "This isn't just a slight difference either," Binkley says. "Often, the larger sizes are 20% more per ounce. There are even reports of times when the surcharge is a full 50% to 100%."

The study found that persons with higher incomes were more likely to fall victim to the surcharging gambit. "These people have high time demands, and they are less likely to take the time to closely examine the prices. They just grab something and go," Binkley explains. "And who can blame them? Who wants to spend all of their time comparing prices on every item? You would be in the store for two hours."

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