Book Reveiw of “Why Popcorn Costs So Much At The Movies…”

Have you ever been curious as to why popcorn is so incredibly expensive at movie theaters? Despite the theater’s fluffy popped kernels being quite tasty, there is actually a reason for this pricing anomaly. In his most recent book, entitled “Why Popcorn Cost So Much at the Movies, and Other Pricing Puzzles,” University of California-Irvine Economics Professor Richard McKenzie explains this conundrum as well as other pricing mysteries. A degree in economics is not a pre-requisite to enjoy this book as McKenzie has seemingly made an effort to omit (for the most part) much of the economics jargon. The resulting effort spawned an insightful and entertaining book that uses relatively basic economic principals and reasoning to explain a variety situations that each of us encounter in our everyday lives.

In the first chapter McKenzie presents a fascinating argument claiming that the 9/11 terrorists have actually killed more people since September 11th than they did on that infamous day. He reasons that the escalating risk costs associated with air travel coupled with higher air travel prices have motivated many Americans to travel by car instead of by plane. Since more people are now driving (instead of flying) the overall number of car accidents can be expected to, and has, risen resulting in more deaths. This is hardly a groundbreaking discovery, as more cars on the road equating to more accidents and deaths seem like a rather obvious conclusion to draw. However McKenzie assembles a plethora of unique evidence to support this claim.

As the book unfolds, McKenzie unravels numerous pricing puzzles such as why stores have sales, the reason for coupons, the relationship between free printers and pricey ink cartridges and others, but none more interesting then the chapter in which the book’s title was derived: Why Popcorn Cost So Much at the Movies. One’s initial reasoning is simply “because theaters can charge a high price.” That is indeed true however, upon further exploration, the pricing theory behind popcorn is much more complex then one might think.

McKenzie proposes that theaters utilize discriminatory pricing to make admission prices cheaper for children. If you have ever taken a child to a theater then you already know that they typically must have popcorn to enjoy while watching the movie. Theaters recognize that children are a driving force behind the consumption of popcorn, which is one of the reasons that children enjoy lower ticket prices.
Additionally, theaters also exercise a form of monopolistic pricing, as moviegoers are not able to bring their own food and drinks. Once a patron passes through the theater’s gates they are at the mercy of the theater’s pricing of food and beverages. As we all know, the prices of such goods at a theater are borderline outrageous however, we have no choice but to pay the exorbitant prices if we wish to enjoy such snacks during a movie.

One of the most enlightening discoveries of the book is that a medium-sized popcorn actually gives you more popcorn than the large tub. McKenzie conducted numerous tests that involved traveling to theaters, purchasing bags of popcorn, and then weighing the contents. He found that, although the large tub of popcorn appears bigger because of the tub itself, the medium popcorn actually gives you more popcorn (8 ounces versus 7 ounces in the large tub). A seemingly trivial but useful finding if you regularly purchase popcorn at the theaters.

Although I enjoyed the majority of the book there were a few chapters in which Professor McKenzie may have overstepped his expertise. In the most controversial yet riveting chapter of the book, “Why Men Make More Money Than Woman and Always Will,” McKenzie references evolutionary processes that date back to the Pleistocene era as one of the reasons for the difference in salaries. Professor McKenzie is an economist, not a scientist or historian. He has no background in science and/or psychology to base such claims.

Continuing with the chapter “Why Men Make More Money…” McKenzie places much of the blame for the difference in salaries on the fact that women are obsessed with looking pretty in order to attract a successful man. This argument may have a place within generalized stereotypes but hardly should be the foundation of a scholarly debate. Also, McKenzie states that one of the main reasons that men are successful is because they want to attract a beautiful woman. He has little fact to base these assertions on and, while the chapter was extremely interesting, it lacked empirical evidence to support his outlandish claims.

Although a few chapters were over-argued and lacked supporting data, the majority of Professor McKenzie’s book included well-written and entertaining banter. Overall I enjoyed this book as many of the price puzzling examples presented were eye opening in their societal implications. McKenzie’s writing style graciously makes this book effortless to read and comprehend. Ultimately McKenzie’s real world examples challenge us to examine the world around us through an economic lens. I would recommend this book to anyone seeking to gain a greater understanding of how basic economics principals can accurately explain pricing enigmas in our everyday lives. Richard McKenzie’s book offers a candid and lively perspective on economics and I look forward to reading his other books.

This entry was posted on December 8. 2008 at 09:31 and is filed under books. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.