The Subway Pizza Principle Is Dead

For more than 40 years, New Yorkers have observed that the price of a slice of pizza tracks with the price of a subway ride, a correlation that has become colloquially known as the Pizza Principle. New Yorkers observe this with a range of casual amusement to fervent religiosity believing it to address some fundamental economic principle. So when Bloomberg reported that a slice of pizza is now well above the price of a subway ride—almost 50 cents more!—it was fairly big news. 

Except for the fact that the Pizza Principle has been dead for at least a decade now, and arguably more like two decades. Starting in 2003 the price of a slice outpaced a subway ride, then dipped below the price of a ride in the mid-2010s, but is now back above it.

But it is futile to declare the Pizza Principle dead, because it is not a thing that lives or dies or is true or false. It is, instead, an exhibit of the desperate twists New Yorkers engage in to inject some sense into the chaos that is this city’s government. In other words, when people have no fucking idea how the subway fare is set, they make up shit like the Pizza Principle.

I know this because that is, quite literally, the origin story of the Pizza Principle. Although the first publication of the Pizza Principle dates back to 1980 when the New York Times ran a cute paragraph in the Metropolitan Diary—a section for anecdotes and poems about city life—about someone named Eric Beam explaining the correlation between slice price and subway fare, the first true explanation of the theory came five years later. Vice president of Bankers Trust Company George Fasel published an op-ed in the same paper headlined “If You Understand Pizza, You Understand Subway Fares.” The upshot of the short piece was Fasel moved to the city in 1979 and was mad about how subway service was deteriorating but fares kept going up, disrupting his delicate understanding of how free markets work. He couldn’t figure out how the price of an inferior, deteriorating service—he preferred walking—could keep getting more expensive. 

Some friend could have explained to him that the price of a subway fare had remained enshrined into law at 5 cents for the first 44 years of the subway’s existence resulting in an awful lot of catching up to do to the actual costs of maintaining a subway system. Or the friend could have detailed the rather naive assumption by lawmakers that if the agency governing the subway was simply run like a business it would pay for itself by jacking up fares. 

Instead, in the article, an unnamed friend told him something that was much easier to understand: The fare has nothing to do with any of that but everything to do with “flour, tomato sauce, and mozzarella cheese.” Fasel was convinced, not because it made sense to him, but because “If you don’t believe this fare-pizza thesis, ask yourself, on Jan. 1, when the price of a subway and bus ride becomes $1, what other explanation there is for the increase.” There’s a big, complicated world out there and you can try and learn how that works or you can embrace this silly theory about pizzas and subway fares. In the ensuing decades, New Yorkers made their choice.

Whether or not the Pizza Principle is dead has been a matter of debate for some time, but no matter what it never actually dies. For example, a 2012 Gothamist story got into all this after another local news outlet, AMNY, argued the Pizza Principle was dead (the Wall Street Journal did the same in 2019, sparking yet another round of debates). Gothamist predictably disagreed, noting that “Historically part of the charm of the Pizza Principle has been its ability to predict changes in fares” in 2009 and 2011. 

Just in case you’re tempted to take the Pizza Principle seriously, consider that there was a simpler way to predict MTA fare changes: a calendar. By then, the MTA had instituted a policy to raise fares every two years to keep up with inflation.

Speaking of inflation, guess what is a better predictor of the subway fare than a slice price? That’s right, inflation. In 2003, the price of a single ride was $2. The inflation-adjusted price of that ride in 2013 dollars was $2.56, and lo, in 2013, the MTA raised the fare to $2.50. And in 2019 the inflation-adjusted fare was $2.78, and wouldn’t you know, a single subway ride in 2019 cost $2.75. 

The actual reasons that go into setting the price of a subway ride are, unfortunately, quite complicated. It involves a lot of political theater and byzantine dynamics between a quasi-public state agency, bond holders, banks, ratings agencies, and ridership dynamics. And now we can throw the federal government into the mix, because a key reason fares have been flat for more than two years now despite high inflation is because of billions of dollars in federal stimulus money. 

The Pizza Principle will never die because most people, quite understandably, cannot be bothered with any of that. It is so much easier to believe the price of a subway ride is set by flour, tomato sauce, and mozzarella cheese.