Jacob, a loyal MR reader, asks me:
When I last visited New York City, I was annoyed that most restaurants there do not offer free refills on soft drinks. Why is this? An easy answer is that it is due to the fact that most restaurants do not have soda fountains, but this explanation is unsatisfying as it does not explain the underutilization of soda fountains. In Europe it has been suggested previously on the blog that this phenomenon is due to high taxes on sugar, etc. but I do not think this applies in NYC.
Since I don't ask for refills, I can't vouch for the empirics, but let's say that's true. The first-order economic prediction is that drinks are sometimes used to charge for table space in the restaurant, a'la the Lott-Roberts paper. The more that land costs, the more that table space costs the restaurant. New York City establishments are usually crowded. That means they want to keep on charging you for holding the table and that means no free refills.
That's just a guess. Do they have lots of free refills in North Dakota?