Calculating the True Cost of a Cheeseburger

New York Times columnist Mark Bittman, who has been steadily producing a superb body of work on the hidden implications of the food we eat, details the “true cost of a cheeseburger” in this column. His accounting is based on the economic concept of “externalities,” defined by Wikipedia as a “cost or benefit that affects a party who did not choose to incur that cost or benefit.” These externalities include pollution, suppressed wages, and obesity, among others.

…Cheeseburgers are the coal of the food world, with externalities in spades; in fact it’s unlikely that producers of cheeseburgers bear the full cost of any aspect of making them. If we acknowledge how much burgers really cost us we might either consume fewer, or force producers to pick up more of the charges or—ideally—both.

An average cheeseburger costs US$4.49, but according to Bittman’s research, the externalities can amount to as much as an additional US$2.90 per burger. Multiply that by the 16 billion burgers that Americans eat per year, and it becomes obvious that the person who cooks and sells a burger and the person who eats it are not the only economic players affected by that transaction. And that’s just figuring in the externalities that can be empirically calculated; Bittman goes into estimates for those that are not so easily quantified as well.

Last year, burger chains grossed about $70 billion in sales. So it’s not a stretch to say that the external costs of burgers may be as high as, or even outweigh, the ‘benefits’ (if indeed there are any other than profits). If those externalities were borne by their producers rather than by consumers and society at large, the industry would be a highly unprofitable, even silly one. It would either cease to exist or be forced to raise its prices significantly.

I love a good cheeseburger, but this macro-view gives me pause. Read the full article here.