Money Where Your Mouth Is: Economist Explains Why We Eat Like We Do

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Empty plate of foodWith obesity and diabetes at epidemic levels, the experts agree that America's diet is in serious need of reform. Even so, there are times when food criticism seems to wander away from the realm of reasoned analysis in the direction of religion. With reformers such as Morgan Spurlock and Michael Pollan preaching about the morality of high fructose corn syrup and organic produce, it can sometimes seem like American cuisine is caught in a battle between good and evil -- and your plate is the OK Corral.

Economist Tyler Cowan sees it differently.

In An Economist Gets Lunch, his analysis of food, farms, and restaurants, he argues that the real story of American cuisine bears little resemblance to the tales told by Spurlock, Pollan and their fellow travelers. From Cowan's perspective, America's culinary problems date back much further, and the solutions may be as near as your local Chinese restaurant.

And the Real Villain Is ...

Most experts blame factory farming and mass production for the downfall of American cuisine, arguing that the availability of cheap, plentiful ingredients translated into blandness. No surprise, the contrarian Cowan offers up a few alternate food villains. He starts by blaming Prohibition.

As he points out, in the 1920s, the country's finest restaurants used alcohol sales to subsidize the prices of their food, and their French-trained chefs often cooked with wine. When America banned alcohol, it effectively destroyed their business model and robbed them of one of their primary ingredients. And while 1933s repeal got the liquor flowing again, it didn't heal the economic damage: It took about 40 years for U.S. alcohol consumption to return to its pre-Prohibition levels.

Cowan also places blame on another unusual set of suspects: our children. His findings suggest that a rising desire to produce convenient food for the entire family meant that parents and restaurants had to adapt by finding ways to tantalize kids' bland, sugar-centric tastes. Add these two factors together with a post-World War II food-packaging push, and you get McDonald's burgers and Stouffer's mac and cheese -- foods that please the kiddies, but not a sophisticated palate.

Using Economics to Pick a Restaurant

So economics changed the American diet back then. But how is it continuing to affect what arrives on today's tables? To explore this question, Cowan begins by showing how even the simple act of picking a restaurant can involve one in a rich web of economic practices.

In his view, the first step toward finding a good restaurant lies in finding good guides -- a group of people who know the area, eat out regularly, and are also "prosperous or middle class but not necessarily rich." His top choices include taxi drivers, firemen, textbook salespeople, and -- generally -- people aged 35 to 55. They have a fair bit of experience, aren't too set in their ways, can afford to eat out regularly, and are interested in getting the most for their money.



But picking a local expert isn't the only route to finding a great restaurant. Even in the absence of friendly taxi drivers and firemen, Cowan says, there are a few hints that one can follow. Not surprisingly, many of these are tied to sound economic practices.

To begin with, he notes, price is often tied to location, a point that he illustrates by pointing that all four of New York's top restaurants are located "in a thin strip of midtown Manhattan." Avoid those high-rent neighborhoods, he suggests: The best deals are found in "low-rent areas near higher-rent customers." Restaurants that take advantage of less expensive spaces -- back streets, suburban strip malls and even food trucks -- can transfer the savings onto their prices and still spend more on better ingredients, which translates into better food at lower cost.

Looking for Family-Run Restaurants With Grim Patrons

Beyond rent, Cowan says, labor is one of the most important factors in food cost, and that's reduced in family-owned restaurants, where family members may work in the kitchen or wait tables for free or at below-market rates. With a lower tab for wages, restaurants can afford to drop prices, which -- he claims -- is why "family-owned, family-run Asian restaurants ... tend to offer good food buys."

Another consideration is competition, which, Cowan argues, helps keep prices down and quality up. As he puts it, "A town that has only a single Indian restaurant probably does not have a very good Indian restaurant."


Perhaps his most important observation, however, is that many restaurants aren't primarily in the food business. Just as in those long-ago pre-Prohibition days, many eateries today derive the majority of their income from alcohol sales. Recognizing the power of this sort of cross-subsidy, Cowan notes, can help you pick the best places to eat.

Another tip: "When I'm out looking for food, one of my fears is to come across a restaurant where the people are laughing and smiling and appearing very sociable," he says. "I also start to worry if the women in a restaurant seem to be beautiful in the trendy 'eye candy' sense."

The reason, he explains, is that restaurants that attract a hip, singles crowd tend to be focus on ambiance, style and selling drinks, rather than putting good, economical food on the table. In fact, he suggests, "It is often best when the people in a restaurant look a little serious or even downright grim."

Economics is often referred to as "the dismal science," a depressing mode of analysis that uses dull equations and fusty formulas to suck all the joy and life out of the world that it purports to explain. And, to be fair, much of Cowan's book is taken up with long, dull diversions into his barbecue-eating experience and the layout of his local Chinese market. Yet for anyone in search of an interesting take on the intersection of the national economy and the average person's wallet, Tyler Cowan -- and his analysis of food -- are a good place to start.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.
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