At Restaurants, Don't Split The Bill

When you're out at dinner with friends, should you divide the bill up evenly?

Economist Russ Roberts at George Mason University says you should think twice about that because in a shared situation, everyone ends up ordering more.

Russ says you should also think twice about earmarks and taxes. He tied all that together in this essay "If You're Paying, I'll Have Top Sirloin" which I just read for the first time and got me thinking about the perils of health insurance.

I e-mailed Russ to ask if he practiced what he preached.

He opens the essay with an anecdote about attending a theater performance where the director asked the audience to vote against a measure that would limit state taxes and perhaps cut the theater's funding.

My question:

You were in the audience at the theater also. How did you feel about knowing your ticket was being subsidized? What if the tax break went away and the theater died. Would you be OK with that?

Russ' response:

Your question is a nice example of how government subsidies can corrupt morality.

Sitting in that audience, I hated the idea that the downstate farmer was subsidizing my enjoyment of Stoppard and Shakespeare. It doesn't seem right, does it? And I would have no problem with that subsidy going away, even if it meant the death of the theater. If those of us who love theater can't pay enough to cover the costs, I don't the logic or morality of forcing people who don't like theater to make up the difference.

But then there's the seductive whisper in the ear that why should we theater-goers be the suckers who stand on principle while everyone else gets to indulge their pet desires? That's what was working on my neighbor so that she could feel good about exploiting others. Toss in a few thoughts about the possible social benefits of watching Shakespeare and the school programs the theater runs and you can feel downright smug about exploiting others.

Russ also hosts the podcast Econtalk.

UPDATE
Russ just sent this email, subject line: Caveat

BTW, it's often wise to split the bill with your friends, it saves time and you like your friends—you might even enjoy subsidizing that second glass of wine. But never split the bill with a bunch (a few hundred millions, say) of strangers. That's how you get the buffet from hell.

Russ

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