Discovered that Happy Meals actually cost more in low-income neighborhoods, even though household incomes there can be just 1/3 of the richest areas. California is one of the worst. Maybe low-income areas have lower elasticity, so franchise owners can get away with charging higher prices.
- We compared the price of a 6-piece Chicken McNuggets Happy Meal in the richest and poorest neighborhoods.
- Method: Used zip codes to identify the top and bottom 10% of household income areas in the U.S., then sampled McDonald’s location and checked Happy Meal prices. Price Inequality = (Poor Area Price – Rich Area Price )/ Rich Area Price.
-Data Source: https://mconomics.com/agents/happy-meal-inequality
Hope kids can have an equal happy meal price 🍔
by Negative-Archer-3807
4 Comments
At first I thought this would be about Vimes Shoe Economics.
Turns out it’s about predatory pricing 🙁
This may not be how it works, don’t “poor” people in “richer” states earn (slightly) more than “poor” people in “poorer” states?
Hypothesis: poor people have fewer options to eat out than rich people, and there are more poor than rich people, so there is more demand for fast food.
I’m not saying fast food is cheap; I’m saying it’s cheaper than most restaurants, let alone the ones wealthier folks frequent.
No clue if this holds, but it’s at least plausible.
Your thoughts?
Or poor people buy childrens meals but get nothing for themselves so store owner needs more return on the happy meals to stay in business.