Burger King Economics: Attaching Dollar Signs to Everything Doesn’t Bode Well

My brother-in-law once said to me, “What I love about economists is the way they can put a dollar figure on everything. They can say, ‘Sitting at one additional traffic light costs a driver $5.37.’” It is nice of him to tell me what he loves about my profession, especially since I’ve never once returned the favor with, “You know what I love about energy traders . . . ?”

However, I can’t tell if he means he loves economists like he loves his wife, or if he just loves us like he loves watching Dumb and Dumber. Is what he loves about the cost-benefit analysis-laden world of economics the ridiculousness of it all? It’s true that economists try to attach a dollar figure to everything. The opinions of haughty arts majors aside, this is a helpful practice.

Dollars are the universal common denominator, allowing us to compare two unlike things. If a shirt or a painting has no quantifiable value, I can never know how many paintings to give you as compensation for taking one of your shirts. When we turn them both into dollars, we can start trading. Most people don’t have a problem with assigning dollar amounts to typical goods and services.

Where economists push the envelope — to the delight of my brother-in-law and the consternation of the local poet — is the pricing of less numerically calculable quantities such as children, contentment and love. Buying love outright is only legal in Nevada, but buying it indirectly is par for the course everywhere. Whether it’s the price of the gifts we give or the opportunity costs we incur for missed chances, love and money are inseparably entangled.

That’s what economists call “the price of love.” It gets trickier still when pricing abstract concepts, like “pain and suffering.” But like anything else, this has a price, too. Agreeing on that price is difficult. One of the worst ways to arrive at a figure is to ask the person who’s about to receive the money what he thinks is a fair amount. Mississippi juries aside, most of us understand that this is a formula for unreliably high estimates.

How much compensation do you need to allow me to slap your face? Would that number change if I were poorer than you? What if I were richer than you? We want a standard that’s a little more scientific unless we work in news media, in which case we go with whatever number helps our story.

In a Wall Street Journal article entitled “As Sales Drop, Burger King Draws Critics for Courting ‘Super Fans,’” reporter Julie Jargon decided to ask former Burger King regular Noah Rubin how much he was saving by trading up Whoppers for organic vegetables. His answer: $100 each week.

I don’t think this claim withstands scrutiny. First of all, supposedly his savings came from trading Burger King bacon cheeseburgers for organic vegetables. That means his original Burger King tab was $100 plus the cost of a week’s supply of organic vegetables, every week. This number also doesn’t hold up when seen in the big picture. A $100 weekly tab comes to more than $5,000 a year.

Now, I don’t know much about Rubin, but I do know that he’s in his 20s, he’s unmarried and until very recently, he regularly ate at Burger King. Statistically speaking, it is incredibly unlikely that he could afford spending $5,000 each year on Burger King. Finally, this number doesn’t survive a more in-depth analysis.

Burger King offers a lot of things, but they don’t serve filet mignon. Most burgers cost less than $5, which means $100 a week buys 20 burgers. A week only has 21 meals in it. Unless you’re a hobbit, like my youngest son who’s usually finished with his second breakfast before I wake up on Saturdays, you don’t eat that much.

Lest you think, “But you’re forgetting the cost of fries and a drink,” I remind you that you’re forgetting the $100 is his savings. Surely his weekly organic vegetable bill covers the cost of the upgrades to extra-value meals. The real news story here should be headlined, “Man Spends Year Eating Burger King Nearly Three Times a Day, Doesn’t Die, Sources Say.” Now that’s a news story even an economist can buy.