Monday, October 03, 2005

Home Economics

Cooking can be done in efficiently in a centralized location than in individual homes. You save on labor costs by having one (or a few) chefs making large meals and subdividing them, rather than having individual family each make their own food. Ingredients are cheaper when they're bought in bulk. A full-time chef will be more skilled than people who cook for themselves are. You can get more variety.

Consider a hypothetical two-income family with two kids where each parent earns $20/hour, which is about the median wage in many cities. If a parent takes one hour for cooking and clean up, then the opportunity cost of cooking was $20. Tack on ingredient costs, energy costs and so on and you're probably up to $30. You could quite easily feed the family at a cheap restaurant, or get delivery, for that less than price. So if the parents in this family cook, this "work" is something they're being substantially undercompensated for.

Obviously this argument applies only to the relatively affluent. But even among that set, the majority of meals are home-cooked by individuals. Why? Obviously most restaurants aren't appropriate for everyday eating, but that just shifts the mystery to why restaurants haven't filled this niche. Some proposed explanations:

1) Social incentives. People feel like they need to cook meals for their kids in order to be good parents, or feel that going out is an extravagance. Or perhaps the economics of home-cooking was better in the recent past, and society hasn't caught up yet.

2) People don't really internalize the idea of opportunity cost, and think of themselves as saving money by cooking, as opposed to thinking of themselves as working for an hour to produce goods without much monetary value.

3) People like cooking. However, I don't think this is very many people. Even those who like cooking, I think, only like making special dishes: they don't like doing it every single day.

4) Nutrition. You don't know what goes into the food you buy from a restaurant. If this was significant, though, you'd expect to see a shift toward healthy entrees along with nutritional information. I don't think that's occurring.

5) Customizability. You get tired of most restaurants pretty quickly, but somehow you never get tired of Mom's cooking. However, I think that this is because we've shifted the burden of doing "cooking research" onto the individual. Everyone builds up a storehouse of cooking knowledge over decades, but that knowledge took work to acquire. If this explanation is correct, then centralization would again be more efficient.

6) Travel is expensive or (equivalently) time consuming. This seems like a good reason in rural areas, but it doesn't work in denser cities.

7) Mass-produced food is worse for some reason. I don't know anything about cooking, but I suspect the reason for this is that the people who have historically eaten mass-produced food (students, soldiers) have had no power to demand anything better.

If I had to guess, I'd say 1 and 2 are the big ones. For me personally, 4 is important as well, but I'm the sort of person who eats brown rice with tofu and vegetables. I don't think most people care *that* much about health.