Starbucks, Bathrooms, and Rational Incentives

Starbucks' chairman should know that individuals are generally rational (given their own preferences) and respond to incentives.

Last May, after the arrest of a black man who had asked to use the bathroom without making any purchase, Starbucks announced that the chain’s bathrooms would now be available at no condition. The company’s chairman declared:

We don’t want to become a public bathroom, but we’re going to make the right decision 100% of the time and give people the key, because we don’t want anyone at Starbucks to feel as if we are not giving access to you to the bathroom because you are less than. We want you to be more than.

He should have known that individuals are generally rational (given their own preferences) and respond to incentives. (Even socialists do!) For example, individuals make more use of facilities if the price is lower—in this case, a public bathroom at a zero price. Other individuals often find it is in their own interests to publicize information about such benefits, or to piggyback on them.

Yesterday, I was shopping at a baby clothing store in a Maine coastal town. I asked for the bathroom and was told that the store didn’t have one for the public. “But,” the clerk added, “there is one at Starbucks just across the street.” At Starbucks’ now public bathroom, there was a queue, and the bathroom was not crystal clean.

Of course, it is or should be Starbucks’s own decision to set the terms on which its property is used. But in doing so, the company should not ignore incentives.

This article was reprinted from the Library of Economics and Liberty.

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