Last weekend was mid-Autumn festival across the Sinosphere, and that I almost as often call it “mooncake festival” probably shows that I seem to be one of the only westerners who actually likes almost all kinds of mooncakes. Culturally, mooncakes at mid-autumn might be closely compared to fruitcakes as Christmas in the west – decorated, preserved, edible gifts in colorful metal tins thrown out a good fraction of the time they are given out.
A recent article in the WSJ mentioned that 2 million mooncakes are probably thrown out in Hong Kong alone. At about 800 calories per mooncake, this represents over a billion calories that might theoretically supplement the diets of a million hungry people, but the critique is as much about the wasteful packaging as about the wasted food. Of all food scandals in China, the one about recycling yolks of these thrown out mooncakes in next year’s batch doesn’t even make most English language conversations this time of year.
Mooncakes do seem to be an example of a Giffen good, which marketers should love because higher prices can oddly enough mean higher demand. These cakes are often given out as gifts in a business context, where packaging and appearance are far more important than what the mooncake actually tastes like, and no one wants to appear as though they spent less than HK$200 for the tin of mooncakes they are giving you. So the marketing race seems to have nothing to do with baking and everything to do with providing more and more elaborate and impressive packaging to justify higher “prestige” pricing.
The textbook economic answer to the environmental cost of all this excess packaging would in theory be simple: tax mooncakes in proportion to how wasteful the packaging is, and use some or all of this tax revenue to pay for recycling or other waste management services when the recipient is done with theirs. Of course, there are two problems with trying this in Hong Kong, with a Giffen good:
- Hong Kong already has too much money. Bond traders complain the HK government does not issue enough bonds. Rather the past few years have seen hand outs of HK$6,000 to each permanent resident.
- If mooncakes really are a Giffen good, taxing them would actually increase demand. This would seem to be counter-productive, but would also be offset by making the “too much money” problem even worse, allowing more funding for a recycling solution.
Many of our lungs are already complaining that this “too much money” problem is a main reason Hong Kong does not have a London-style congestion charge despite its excellent public transit.
A marine biologist also observed a strange difference in how Chinese demand reacts to an environmental problem: “In the west, when something becomes scarce, we tend to want to preserve it. In China, when something becomes scarce, everyone seems to rush out and want to try it while there’s still some to be tried.”
On to the next holiday now – enjoy the fall and stay green!
