College Guide

Blog

March 08, 2013 2:05 PM The Economics of Nutella Theft

By Matthew Kahn

Nutella

I taught econ 101 at Columbia University for several years. I taught thousands of students but perhaps none took jobs in the Columbia Administration. In my class, we talked about the law of demand but we didn’t discuss the undergraduate demand for Nutella. Apparently when you offer it at marginal price of zero, demand is huge. To quote the Times:

“Last month one of Columbia’s undergraduate dining halls began serving Nutella every day, not just in crepes on weekends. For the uninitiated, Nutella is a creamier-than-peanut-butter, chocolate hazelnut spread from Italy that a college student might eat a whole jar of in a single sitting when the pressure is on.
The problem was that the Columbia students went through jars and jars of Nutella — at least 100 pounds a day, according to a freshman member of the Columbia College Student Council who had urged the university’s Dining Services operation to provide it in the first place. Apparently they were not just eating it in the dining hall. They were spiriting it away in soup containers and other receptacles, to be eaten later.
For Dining Services, the unexpected demand was an unexpected expense.”

This specific story has many implications for how we run the modern University. Zero marginal cost pricing for water, toliet paper, napkins, lighting, printing, and food create bad incentives and a lack of sustainability on the modern campus.

[Cross-posted at The Reality-based Community]

Matthew Kahn is a professor at the University of California, Los Angeles's Institute of the Environment. He specializes in the environmental consequences of urban growth and related quality-of-life issues.