Economics of Eating at Lehigh

April 30, 2011 in Editorial

Choosing the right meal plan can be a difficult thing to do. There’re many options, and the combinations of meals and dining dollars only makes the choice more difficult. In this post, Centives decided to take a look at the meal plans and determine their various values. Beware if you’re on anything other than the 19 weekly meal plan; the results are likely to shock you.

The easiest meal plans to evaluate are the block plans. These plans offer students a set number of meals to use throughout the semester, and multiple meals can be used in each meal period if the student chooses. Thus, they offer a fair amount of freedom. Centives looked at how much each meal costs if you buy into the various block plans. The general trend in these block plans follow the theory of economies of scale. The larger the number of meals in the block plan, the less you pay per meal. For the 225 and 150 meal block plans, the costs per meal, including the guest meals, are $9.48 and $11.71 respectively. The cost per meal in the 75 meal block plan is $12.67 and $13.70 per meal for the 50 meal block plan.

Economics of Scale in the Block Plan

What’s stunning is that the door prices for eating in the dining halls are:

For anybody on the 50 or 75 meal block plan it would be cheaper to show up at the door and buy entrance to the dining halls by paying a maximum of $12.25 rather than pay $13.70 or $12.67 per meal. The 150 block plan only makes economic sense if you consume nothing but specialty dinners, which would mean that you would have to consume 1.4 specialty dinners every day of the 15 week semester (and remember, you can’t swipe your friends in.) Any other combination would be cheaper than the $11.71 the 150 block plan will cost you. The 225 block plan seems more reasonable since it only costs $9.48 per meal, but if you were to buy one breakfast, one lunch and one dinner per day then that would still only cost you an average of $9.16 per meal.

Then there are the weekly meal plans. The weekly meal plans set a limit to the number of meals a student can purchase using the meal plan every week, and starts anew once the week is over. These plans offer slightly less freedom to students as they only require a student to plan his or her meals for a week, not an entire semester, and they limit how many meals you can use per day and per meal. These calculations have been made under the assumption that a semester is fifteen weeks long. This can, however, differ for each student depending upon his or her finals schedule. The 19 meal plan costs $7.52 per meal, the 14 meal plan costs $9.91 per meal, and the 10 meal plan costs $12.03 per meal.

Economics of Scale in the Weekly Plan

Once again the 10 meal plan only makes sense if you consume 1.4 specialty dinners a day, even the 14 meal plan would only make sense if you skip breakfast and buy only lunch and dinner every day. The 19 meal plan makes the most economic sense but any meals that remain unused are lost in the weekly plans.

If we assume that a student goes to the dining hall and buys breakfast, lunch and dinner every day, then this is the difference between what they would pay in cash at the door and what they pay for in the meal plan. As the graph demonstrates only the 19 meal weekly plan makes sense:

In the worst case scenario, if you’re on the 50 block plan and you use it to buy breakfast, lunch and dinner then you end up paying an extra $4.53 for every meal that you consume simply because you chose to be on the meal plan! Obviously the graph above would be different if the assumptions didn’t hold.

So far we’ve assumed that you’ll be eating at the dining halls. What if you didn’t and converted them into money at the rate of $4.35 per meal. You would lose $1201.25 with the 225 meal block plan, $1162.50 with the 150 meal block plan, $623.75 with the 75 meal block plan, and $467.50 with the 50 meal block plan. For the weekly meal plans, you would lose $940.25 for the 19 meal plan, $1216.50 for the 14 meal plan, and $1212.50 for the 10 meal plan.

If we assume that the cost per meal to Sodhexo is $7.52, the amount they charge under the 19 weekly meal plan (this is a conservative estimate since it assumes that Sodhexo makes no profit of off students on this plan), then we can estimate the amount of profit that Sohexo makes of off you depending on which meal plan you have: