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Fall 2007

ISSN 0890-913X

Volume 23, Number 1

Categories: Education | Fall 2007

A Taste of Protectionism: Coca-Cola in the Classroom

Benjamin Powell, Texas Tech University

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journalofPrivateEnterprise,VolumeXXIII,Number1,Fall2007ATasteofProtectionism:Coca-ColaintheClassroomBenjaminPowell*SuffolkUniversityBeaconHillInstituteTraderestrictionstypicallycoststudentsverylittleasapercentoftheirexpenditures,soitisalltooeasyforthemtoconcludethateconomists'ideasaboutinternationaltradeareabstractandapplylittletotheirdailylives.ConductingaCoca-Colatastingintheclassroomcanhelpdrivehomehowinternationaltradepolicyaffectstheminawaythattheywillrememberbeyondthefinalexam.Importquotaspushthepriceofsugar(i.e.,sucrose)intheU.S.farabovetheworldmarketprice.In2006theaverageworldmarketpriceforrawsugarwas15.5centsperpound,whileintheU.S.thesamepoundofsugarcost22.1cents.Overthelast25yearstheU.S.priceofsugarhasaveragedmorethandoubletheworldmarketprice.AsFigure1shows,aconsistentgapbetweenU.S.andworldmarketpriceshasexistedsince1960,andthetrendhasbeenparticularlypronouncedsince1982.Meanwhile,cornsubsidiescombinedwiththesugarquotaskeephighfructosecornsyruppricesintheU.S.consistentlybelowtheU.S.priceofsugar.1Asaresultofthesepricedifferentials,Coca-ColaaltersitsrecipeintheU.S.Coca-ColaismadeusingsugarthroughouttheworldbutitismadewithhighfructosecornsyrupintheU.S.The*Ithanktwoanonymousrefereesforhelpfulcomments.IAlldatainFigure1comesfromtheU.S.DepartmentofAgriculturedatatablesavailableonlineat:http://www.ers.usda.govibriefing/sugar/data.htm.Dataisgivenforallavailableyears.BenjaminPowell154

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Title	A Taste of Protectionism: Coca-Cola in the Classroom
Authors/Creators:	Benjamin Powell, Texas Tech University
Year:	2007
Volume:	23
Number:	1
Pages:	154 - 158
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Educational Notes
Keywords:	Economic education, Protectionism, Trade policy

Citation:
Powell, Benjamin / 2007. "A Taste of Protectionism: Coca-Cola in the Classroom." The Journal of Private Enterprise, 23(1): 154-158.