Tuesday, September 8, 2009

Home Cooking

One of the main predictions of economics is that people will specialize as society gets richer, more complicated, and more technologically advanced.  Instead of doing everything ourselves, we will train for a specific job and use our money to buy everything we need.  And this prediction usually comes true.  We no longer make our own clothes or build our own shelter.

But this prediction does not hold true with cooking.  Most people who have thought about the future in the last century thought that, by the 21st century, nobody would cook their own food.  And yet we do.  Yes, there are some people who don't know how to cook and go to restaurants or order food all the time.  But contrary to economic theory, these people tend to be the poorest members of the society, rather than the richest.  Why is it that high-wage people spend so much time doing a menial activity rather than hiring specialists to do the job?

In my experience, many people who learned how to cook good food did so for health reasons.  If you or a family member has gluten intolerance, juvenile-onset diabetes, or some other special food need, then it will be very hard to purchase a good, suitable diet on a middle-class income.  You will have to learn how to provide it yourself.  And once you learn how to do that, you find that you are a much better cook (from your point of view) than the people working at most of the local restaurants.  You have become the efficient producer of your food needs.

But this cannot the the main reason; there are plenty of people with no special needs who cook their own food.  Why is this?

One explanation is that most chain restaurants are horrible, from both a health and quality standpoint.  Their entire strategy is to attract impulse purchases from the ignorant or time-constrained, and this leads to calorie-dense, nutrient-poor dishes that are loaded with salt, fat, and simple carbohydrates.  Once you reach a certain level of education and awareness, you simply cannot tolerate this on a regular basis.  So people cook their own food because they have no other alternative.

But an economist is not satisfied with this explanation.  Why has the market failed to provide restaurants that meet the needs of people who want good, healthy food?  The demand is clearly there, and the people demanding it have money.

The answer is cost.  These restaurants do exist, but they are very expensive.  I would have to pay at least $30 a plate to get food that is as good and healthy as the stuff that I, my mom, my dad, or my friend can cook on a regular basis.  Getting good ingredients, keeping them fresh, and cooking them properly takes attention and skill, and it costs a lot to hire the kind of people who can manage it.*

My conclusion is that the desire for good food rises faster than income.  Your palate expands faster than your wallet.  In economic terms, good food has a very high income elasticity of demand.  A poor person earning $10 an hour is satisfied with an $8 dinner from a chain restaurant.  A richer person earning $30 an hour wants a dinner that would cost $50 a plate if purchased in a restaurant.

Assuming that the same abilities that increase earning power allow one to cook food more efficiently, so that each person takes one hour to prepare dinner, it makes economic sense for the poor people to eat out and the rich people to cook their own food.

*There is also the matter of communication costs.  You know what you like.  You know what brand of sauces you prefer, and exactly how long and in what manner you like your vegetables cooked.  It is costless for you to incorporate this information into your own cooking, but very costly to communicate these requests to a restaurant, or to find a restaurant that meets your preferences.

1 comment:

Lou said...

Eating out is for vacations and when the overpowering urge for junk food kicks in. Other than that home is the best.