I'm not an econ person, so this is a super naive question, but here goes: why, given the comparative advantage that specialization produces, does anyone prepare their own food rather than buying from restaurants all the time? It seems like there should be economies of scale with respect to food production (restaurants prepare food far more efficiently than I can do at home). Where I live, it's often cheaper to prepare your own food than ordering take out, but I can't understand why.

  • $\begingroup$ Welcome to Economics:SE. Thank you for your question; please consider revising it to be more in line with our community expectations. Like many other stacks, we expect questions to provide evidence of prior research. That helps us to understand the question, and avoids our repeating work you've already done. Our help center, and other stacks provide additional resources to assist with revisions. $\endgroup$ – 1muflon1 Feb 28 at 10:34
  • $\begingroup$ My comment here is likely to get downvoted, yet it is worth making the point that theories regarding economic behaviour do not apply to all aspects of human decision making. That is to say, there are times in human decision-making when efficiency is not the predominant concern. Especially, when something such as food has more than simple consumption value to the individual. It may have cultural significance; it may have spiritual significance; it may have familial significance. People may enjoy control over their own processes etc etc. It is not always about how inexpensive it is. $\endgroup$ – EB3112 Mar 1 at 21:41

The weights used in the U.S. CPI (from 2016) are available here: link to BLS weights. Note that these weights are based on consumption data, so that they are meant to align with actual spending patterns.

If you look at them, you will see that the majority of the weight is either processed food or food away from home. Note that some categories explicitly state “processed,” but even things like salad dressing are put together in a factory.

Factories have a comparative advantage for processing food, but not for delivering hot food. Meanwhile, food is normally shipped in a form that can be stored. A box of pasta can be held in a store a lot longer than pasta that has been boiled and put into a container. Households do the final heating steps. As such, the premise of the question is somewhat flawed - processing is being done largely in an “efficient” fashion (although there are debates about food quality).

Restaurants are required to pay workers and rent and expect to make a profit, whereas food prepared (or just heated up) requires no payment. Cooking is labour intensive, and so it is hard to compete against \$0/hour if we look at the cost of the meal. Individuals might value their time at more than \$0/hour, but how they value their time does not matter if they cannot get more paid work and face a strict monetary budget constraint. Meanwhile, travelling to get a meal takes time. Finally, being reliant on food away from home poses risks, as seen in the pandemic.

  • $\begingroup$ Thanks for the response. I'm sure I'm missing something here, but I still don't understand why food preparation is more efficiently done at home. I live in a reasonably dense city, so it's not hard to get hot food (restaurants are nearby). I also value my time at more than 0$/h, and I don't have the kind of food assembly line that restaurants do, so it seems like my food production is less efficient. It just seems like cooking is one of those things where there should be good returns to scale. $\endgroup$ – Rando McRandom Feb 28 at 1:16
  • $\begingroup$ home cooking has opportunity cost so restaurants are not competing against $0/hour $\endgroup$ – WilliamT Feb 28 at 1:31
  • $\begingroup$ @RandoMcRandom If you go into a grocery store in the developed world, almost everything that is not fresh fruit, vegetables, meat, and fish were processed in a factory. Other than some fish, even meats are processed in meat packing plants. So returns to scale are being exploited. As for meals away from home, how you value your time is an arbitrary decision that does not affect the price you pay for your meal. You may be able to afford eating solely restaurant meals, but others are not in that position, $\endgroup$ – Brian Romanchuk Feb 28 at 2:04
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    $\begingroup$ Or perhaps people are working the maximum hours that they can, and cannot afford the extra cost of restaurant food. It does not matter what you think your time is worth if you face a strict monetary budget constraint. And all of these comments are ignoring the time it takes to go to the restaurant. $\endgroup$ – Brian Romanchuk Feb 28 at 2:49

It depends on two things:

  1. Do you make a certain amount such that if bought food rather than spend the time cooking and cleaning afterward, you would have saved money? In other words, if you make \$50 an hour, and your meal costs \$20, it makes sense to buy the food rather than spend an hour picking out the ingredients from the grocery store, prepping it, and then cleaning up afterward.
  2. More importantly, however, can you GET that hour, if you hadn't spent it on prepping the food? In other words, if you're a freelancer, and you know if you spent the hour looking for a job, getting the job, and doing the job, it makes sense. But if you're salaried worker, just because you spent the hour working instead of cooking doesn't mean you're going to get 1 more hour's worth of money.

Also, some people just like cooking their own food, and food you buy outside tend to be high in sodium and fat.

  • $\begingroup$ @1muflon1 While many answers would be improved by adding references, I suggest that the points made in this answer (which are relevant to the question even if far from a complete answer) are largely based on general knowledge and common sense, and don't really need support from references. Do we really need a reference to confirm, for example, that salaried workers often do not have the option to work an extra hour for an extra hour's pay? $\endgroup$ – Adam Bailey Feb 28 at 23:15
  • $\begingroup$ @AdamBailey no common sense does not need to be referenced, but I do not think that "food you buy outside tend to be high in sodium and fat" is common sense. That rather sounds something that many people believe in but might not necessary be true given changing dietary fads. Regardless, I gotten rid of the post notice in this case, but if we want to attract high quality contributions we should be more strict. For example, the post says that only monetary aspects matter and ignores utility/opportunity cost - that is both incorrect and not consistent with general knowledge or even common sense $\endgroup$ – 1muflon1 Feb 28 at 23:59

Lets look at the cost of a simple Hamburger.

If I order it at my local pub: The food cost will run about 33 +/-3% of the menu price. Labor is a close second 32 +/-4% For every employee you see there is another in the back of the house. Overhead Rent, utilities build out. 30 +/-4% and finally profit 5-10%

If you cook at home your cost of food is really going to cost you similar to what you could buy at the store. The main difference is the quality of what high end steak houses are buying vs what you can buy at a local grocery store. At home you don't really have a labor cost unless you are reducing your income potential by cooking. Overhead is a sunk cost you are have to pay for

  • $\begingroup$ Hi, welcome to Economics:Stack Exchange. Please consider improving the answer by adding references from reputable sources. As many other science stacks we encourage links to external sources. See our help center. $\endgroup$ – 1muflon1 Feb 28 at 10:23

There's little evidence that ordinary eat-in restaurants are more efficient at preparing and serving food than home-cooks.

It is more credible to think that factories are more efficient at processing food than home-cooks, which is why there is nowadays actually an abundance of food in frozen or otherwise prepared forms (including that which is supplied to restaurants).

In terms of hot food, the main inefficiency of doing this centrally would be the travel time (and travel cost) incurred at every meal, and the need for physical infrastructure that is capable of rapid distribution of hot food to a large and hungry multitude. Cooked food usually starts to deteriorate in perceived quality within minutes of cooking being concluded.

Meanwhile, once the preparation of food is done, there is very little to be gained in terms of efficiency whether it is cooked centrally or cooked at home. So in general, the distribution of uncooked food is far more efficient, since it reduces the urgency of distribution (with large spikes in demand at conventional mealtimes), and usually a number of uncooked meals can be retrieved in one transaction with the distributor, and then cooked at leisure.

Generally speaking, the amount of labour required for home cooking can already be reduced to a matter of minutes of active labour, and a few tens of minutes of passive waiting, and it's very difficult to make further economies on this stage of the process.

  • $\begingroup$ Hi, welcome to Economics:Stack Exchange. Please consider improving the answer by adding references from reputable sources. As many other science stacks we encourage links to external sources. See our help center. $\endgroup$ – 1muflon1 Feb 28 at 10:37

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