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

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, or follow him on Twitter at @bruce1971.

Increase your money and finance knowledge from home

What is Inflation?

Why do prices go up?

View Course »

Economics 101

Intro to economics. But fun.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

We eat like we do because everbody seems bent on shoving garbage down their necks.

May 18 2012 at 8:22 PM Report abuse +1 rate up rate down Reply

The author makes some good points but leaves out some very interesting facts. He conveniently leaves out the fact that the FDA is now run by Michael Taylor, the formmer VP at Monsanto. Monsanto is the world's largest purveyor of genetically modified food and has been given extraordinary powers to decide what is healthy and what isn't for all Americans. Second point, all the major industries (dairy, beef, etc.) are all vying to get a share of the profits from our food purchases and have a major influence on the how and what Americans eat. Look at the new food icon, MyPlate, which has every major food industry represented but has no real healthy information about what types of food or food practices are truly healthy. Finally, he doesn't even mention nything aabout the role Big Pharmacy plays in all this. They want us fat and sick because it helps them make billions of dollars a year in profits. Without unhealthy eating habits they stand to lose a bundle. If you really want to find out more about how our food has been hijacked over the years there's a great book that just came out which reveals what is really going on with our food supply. It's called "Warning! Your Healthy Diet May Be Killing You"

You can find it here:

May 18 2012 at 3:00 PM Report abuse rate up rate down Reply
Get real.

Anyone who has spent a month or more in nations in Europe where fruit and vegetables are still natural (no genetic modifications, picked fresh and not shelved for weeks before selling it, or artificially ripening it with chemicals, etc..) knows the bizarre sensation you get after returning to the United States and all of the food tastes like paper. The only thing you can taste is salt, pepper and hot sauce. Everything else is bland beyond belief. After a few weeks you get used to it again, but not subconsciously. I do believe that there is part of your mind that is not satisfied by these artificial foods, even though you get used to the lack of flavor on your tongue.

May 18 2012 at 2:58 PM Report abuse rate up rate down Reply
1 reply to Get real.'s comment

According to his book, when Colin Powell was in Vietnam, on patrol with his Vietnamese counterparts, they ate fish and rice for several months. He lost some 30 lb and became lean and well sculpted. After returning to the American base, his first meals consisted of typical heavy meat, gravy and potatoes, and breakfasts of bacon, eggs, sausage etc. He wrote that he almost barfed after his first meals.

I was in Japan for 2 weeks, and got used to eating much less food, less meat and less sugar. It kinda grew on me, even though at times I did not know what some of the stuff was that our hosts were feeding us. On the flight back on N.W. airlines, the first breakfast was greasy sausage and pancakes with sugary syrup. It all looked and smelled so disgusting. The Japanese businessman, seated next to me, looked at his food and could not believe what they were serving - didn't know what to do with it.

May 18 2012 at 8:54 PM Report abuse rate up rate down Reply

Like I heard someone say once," Make broccoli and apples cost as little as fast food combo meals, and food quality will rise,and obesity problems will fade."

May 18 2012 at 2:42 PM Report abuse rate up rate down Reply
2 replies to bigcjdadd's comment

Vegetables and fruit (organic or genetically modified) are cheaper than meat (organic and genetically modified). A pound of bananas is 54 cents, but this where I am.

May 18 2012 at 9:42 PM Report abuse rate up rate down Reply

It's actually cheaper to eat healthy than it is to live off fast food, especially if you have a family to feed. One meal we prepare ourselves costs between $8 and $15, and we almost always have leftovers that can be used for lunch or another dinner. A fast food or takeout meal for my family of 4 is always more than $20, unless we get Little Ceaser's pizza. People eat fast food because it's easier, not cheaper.

May 19 2012 at 12:26 AM Report abuse +1 rate up rate down Reply

I saw this place on Travel Channel. The place was packed with people eating some probably absolutely delicious, but unhealthy food! I always watch what I eat to be sure it is low fat, low carb, etc. AND I am afraid if I walked in there..I would be really tempted. I hope this man who had the stroke gets well quickly.

May 18 2012 at 1:37 PM Report abuse -1 rate up rate down Reply

"It is often best when the people in a restaurant look a little serious or even downright grim." That describes every McDonalds I have ever been in.Cheap, maybe but good? I don't think so.

May 18 2012 at 12:54 PM Report abuse +1 rate up rate down Reply
1 reply to waagtod's comment


McDonalds must be doing something right..... billions served.....

May 21 2012 at 9:00 AM Report abuse +1 rate up rate down Reply

A man has to have something to write about, even if it is wrong.

May 18 2012 at 12:38 PM Report abuse +3 rate up rate down Reply

And why do we need convenient food? Because mothers are working and kids are involved in activities almost around the clock.

May 18 2012 at 12:14 PM Report abuse +3 rate up rate down Reply

yeah, keep yer butt out of Mickey dees and the like...

May 18 2012 at 11:53 AM Report abuse +1 rate up rate down Reply

what a joke .

May 18 2012 at 11:45 AM Report abuse rate up rate down Reply