Behavioral Economics Explains Packaging Choices

Mike explains price anchoring and consumer psychology that lead firms to shrink packages instead of raising sticker prices.

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In this episode of The Missing Middle, Mike Moffatt and Sabrina Maddeaux dig into the rise of shrinkflation, from grocery store products like cereal and Kraft Dinner to Canada’s shrinking condos, and reveal how companies, developers, and government policies are quietly giving Canadians less for more. From deceptive packaging and behavioral economics tricks to the rise of shoebox condos and poor layouts, we explore how rising costs, investor-driven development, and flawed housing policies are reshaping everyday life. If you’ve ever wondered why your groceries don’t stretch as far or why today’s apartments feel more like closets than homes, this is a conversation you won’t want to miss.

Chapters

00:00 Introduction

01:08 Understanding shrinkflation

02:54 Sabrina’s a KD fangirl - who knew?

05:12 The economics behind shrinkflation

07:22 Price anchoring explained

08:25 The shrinking size of living spaces

11:52 Why are units getting so much smaller?

15:39 What’s driving bad design?

18:02 Generational perspectives on housing preferences

19:22 Constrained optimization explained

21:26 Is the investor condo market dead?