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Eating Out Is Less Expensive Than Cooking At Home


FunnyJohn
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It really depends on what costs you include in the "cost."  The variable costs are obvious; raw food cost.  But there's more, in theory at least, and it can get murky very quickly.  For example, what about the vehicle operating costs to go to the store?  (this however would also apply to the restaurant, and would depend in part on relative distance).  Do you just look at gas or at all the costs of owning and operating the car, allocating them by mile?  What about the energy cost of cooking and storing food -- since this was a steak comparison, energy would be very high if you use charcoal.  What about the cost of owning cookware, and even having a kitchen as part of your house -- if you could eliminate the cost of building a kitchen, you could eat out for a long while on the savings, all of which is another way of asking whether you should include as a "cost" the fixed costs of having a kitchen or simply ignore them.  What about the energy and other costs of washing up afterwards ?  Most important of all, what about the alternative use-value of your own time?  For someone who likes to food shop and to cook, this would be small -- for someone who hates to cook, this would be high.

In short, the answer isn't obvious, and depends on the individual's circumstances and preferences.  Accountants have been grappling with (and arguing about) this stuff since double-entry bookkeeping was invented, i.e. for hundreds of years.

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If you read through to the end, the author demonstrates that the initial outlay of cash was close to that of the restaurant cost, but she had food remaining after the meal that went toward the next few meals, something that wasn't taken into account in the initial "study."  They also chose an expensive meal as the example.  Try a pasta dinner out compared to the cost of a pasta dinner at home, or paella, or summer rolls, or soup, etc.  Then there are those of us who garden.  During the summer when the garden is going full force, I don't buy anything except a few staples like pasta and rice, and those are pretty inexpensive.  I think I had an input of about $20 worth of seeds this year, and I got bags of composted horse manure for free off Craigslist.  We'll eat for three months solid and have food in the freezer for this winter.

Long story short, I'm not buying it.

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This is pretty interesting, and I suspect there is some sort of bell curve in cost differential at play.  Even if you exclude things like paying for gas to drive a car to go shopping and actually having a kitchen in the first place, there is probably a sweet spot where home cooking is maximally less expensive (yes, I just wrote that) than eating out.  There is no way I could beat a $1 fast food burger unless the whole family ate one for every meal for a week so we could achieve some economy of scale, and even then we are talking pennies.  Mid-level casual sit down (chain and mom 'n' pop alike)?  Sure, I think this is where your dollar buys you the LEAST compared to preparing at home.  As you get towards real high end or specialty cuisine or molecular gastronomy I think the chart would trend back the other way.  I suspect wholesale or commercial prices for a lot of high end ingredients are markedly different than retail, and not just as a dollar figure to account for higher pricing but on a percentage basis, too (those in the biz, please back me up here!).  And there are direct production-related costs you would have to amortize: does that meal require a sophisticated sous vide cooker to pull off?  How much do PacoJets run these days?  And if you take all of the trappings of high-end dining rooms off the balance sheet for a restaurant the home cook is even worse off!

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It really depends on what costs you include in the "cost."  The variable costs are obvious; raw food cost.  But there's more, in theory at least, and it can get murky very quickly.  For example, what about the vehicle operating costs to go to the store?  (this however would also apply to the restaurant, and would depend in part on relative distance).  Do you just look at gas or at all the costs of owning and operating the car, allocating them by mile?  What about the energy cost of cooking and storing food -- since this was a steak comparison, energy would be very high if you use charcoal.  What about the cost of owning cookware, and even having a kitchen as part of your house -- if you could eliminate the cost of building a kitchen, you could eat out for a long while on the savings, all of which is another way of asking whether you should include as a "cost" the fixed costs of having a kitchen or simply ignore them.  What about the energy and other costs of washing up afterwards ?  Most important of all, what about the alternative use-value of your own time?  For someone who likes to food shop and to cook, this would be small -- for someone who hates to cook, this would be high.

In short, the answer isn't obvious, and depends on the individual's circumstances and preferences.  Accountants have been grappling with (and arguing about) this stuff since double-entry bookkeeping was invented, i.e. for hundreds of years.

A bit of thinking too hard here.  You can't buy a house without a kitchen, so that variable is moot (and if you did, how would that effect resale?).  Since once generally buys more than one meal's worth of food during a grocery store trip, car costs are likely less for home-cooked than heading to a restaurant.  Steaks can be pan roasted to excellent effect.  It can quite easily take as long to drive to, await service in, order at and pay the check for a restaurant as it does to cook a steak.  The ingredients and preparations for a home-cooked meal are likely of of higher quality than those provided by a price-conscious food chain.

And, if you're a decent cook, the dinner tastes better, too, so there's that.

here is no way I could beat a $1 fast food burger unless the whole family ate one for every meal for a week so we could achieve some economy of scale, and even then we are talking pennies.

The patty on a dollar burger is 2 ounces, or less than 50 cents worth of retail beef. A bun is about 15 cents.  Though, affluent yuppie that I am, I'd suggest that when you're comparing $1 burgers against equally cheap home-cooked stuff, the price is not the determining factor.

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The patty on a dollar burger is 2 ounces, or less than 50 cents worth of retail beef. A bun is about 15 cents.  Though, affluent yuppie that I am, I'd suggest that when you're comparing $1 burgers against equally cheap home-cooked stuff, the price is not the determining factor. 

Sorry, that should have read:

There is no way I could beat a $1 fast food burger by a significant margin unless ...

Cooking at home will always be cheaper than the same item eaten at a restaurant, the question becomes where to put the tipping point.  Fast food is probably the murkiest realm from which to address this question since is conflates a lot of non-food related cultural issues, but my point was that wherever you put the value the difference will literally be in pennies.

So, thought experiment!  Say you were going to make a comparison between what it costs for a restaurant to produce a single meal vs. what it would cost you to do it at home.  Some constraints on this thought experiment to get to the core cost differential:

1) This meal will be served in your dining room; we can factor out the additional overhead that a restaurant incurs by running a large dining room.

2) Attached to your dining room are two magic portals: one leading to the fully equipped restaurant kitchen designed to pump out this meal, and the other leading to an equally-sized kitchen space that is only equipped with your current cooking implements and appliances in one small, pathetic corner.

With these parameters to start with, how much more cheaply could your produce any given restaurant's cuisine such that it could pass a culinary Turing test? At what point does your meager equipment start showing through and force some upgrades (which must be paid for and accounted for in your final meal cost)?

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A bit of thinking too hard here.  You can't buy a house without a kitchen, so that variable is moot (and if you did, how would that effect resale?).  Since once generally buys more than one meal's worth of food during a grocery store trip, car costs are likely less for home-cooked than heading to a restaurant.  Steaks can be pan roasted to excellent effect.  It can quite easily take as long to drive to, await service in, order at and pay the check for a restaurant as it does to cook a steak.  The ingredients and preparations for a home-cooked meal are likely of of higher quality than those provided by a price-conscious food chain.

I wasn't suggesting you could actually buy a house without a kitchen, of course, only pointing out that it isn't clear what costs you put into your calculation, specifically, do you allocate fixed costs or ignore them? It's not so simple as it might appear.

Consider the following not unreasonable hypothetical: a couple who tend to eat out a lot is looking at houses.  One has a $30,000 kitchen and one has a $60,000 kitchen.  Wife says if they buy the one with the 60k kitchen she'll be inspired to cook more at home and they can eat out less.  So they buy it, and she does more cooking at home, and does spend less on food from the grocery than before from restaurants, and so they think they are saving money.  The question is, are they?

There are many answers, even many correct answers, but it all depends.

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I wasn't suggesting you could actually buy a house without a kitchen, of course, only pointing out that it isn't clear what costs you put into your calculation, specifically, do you allocate fixed costs or ignore them? It's not so simple as you might think.

Consider the following all-to-realistic hypothetical: a couple who tend to eat out a lot is looking at houses.  One has a $30,000 kitchen and one has a $60,000 kitchen.  Wife says if they buy the one with the 60k kitchen she'll be inspired to cook more at home and they can eat out less.  So they buy it, and she does more cooking at home, and they think they are saving money because they eat out less.  The question is, are they?

There are many answers, even many correct answers, but it all depends.

Yes, they are, if she's controlling for added fat and sodium and avoiding the cost of a triple bypass surgery later.  Not to mention avoiding car accidents on the way back and forth to all those restaurants and the cost of drunk driving, even once.  Like most costs, comparing a one-time meal vs. cook at home is merely one data point on a multiple-year, lifecycle (ha! pun in this case!), cumulative, comprehensive cost picture.

This is one way of echoing your sentiment "it depends".  Although a certain elderly product has really mucked with my comfort using that phrase...

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Several film and television actors have used the phrase, "I'm a simple man (or woman)" or "keep it simple" and that kind of ethic.

In that spirit,

- it's good to cook at home.  it can be more cost effective but, more important are all the other advantages of doing so for many families and individuals.

- it's also great to eat out at whatever spots one likes; again for lots of obvious reasons.  this can also be more cost effective.  or more expensive.

And, yes, it all depends on roughly a kazillion variables relevant to so many different people and situations. Any debate about which is more or less expensive is futile. That's an assertion of which the Borg would also likely approve. Kind of like resistance.

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Yes, they are, if she's controlling for added fat and sodium and avoiding the cost of a triple bypass surgery later.  Not to mention avoiding car accidents on the way back and forth to all those restaurants and the cost of drunk driving, even once.  Like most costs, comparing a one-time meal vs. cook at home is merely one data point on a multiple-year, lifecycle (ha! pun in this case!), cumulative, comprehensive cost picture.

This is one way of echoing your sentiment "it depends".  Although a certain elderly product has really mucked with my comfort using that phrase...

Two can play the "if game."  To continue with your health concern, what if she uses lots of butter and cream, and bacon?  What if she frequently burns things and creates cancer-causing substances? We're not talking about DonR poster-type people here. As to car crashes (that one is a major stretch by the way), what if instead of going out they ate a lot of delivery food? I know this may come as a shock to some, but one can, if one chooses, get healthy eat-in or delivery restaurant food these days.

I have no clue what "comparing a one-time meal vs. cook at home is merely one data point on a multiple-year, lifecycle (ha! pun in this case!), cumulative, comprehensive cost picture." means, so can't comment.

Bottom line -- your answer is correct, and the exact opposite answer is also correct. That's what you are dealing with when you try to cost things out when there are, in addition to the simple marginal costs, also fixed costs, common costs, sunk costs, and joint costs.

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As a data point, and as someone who eats out nearly every single meal (somewhat frugally, I will add), I can safely say that it's considerably less expensive and more healthy to dine in - if I cooked every meal at home, my food cost would surely go down by 50%.

If you're a billionaire, and your time is worth an enormous amount of money per hour, perhaps not.

Dining out *and dining healthy* is an expensive proposition - not only that, but you have to *really* know what you're doing to avoid unhealthy restaurant food.

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If you consider how much dining costs in the district and in other close in areas wherein the rents are crazy high and have accelerated like virtually no other part of the country that concept is absurd.   Alternatively in this area  we have a wonderful description of the inexpensive costs for dining at ethnic meals in the suburbs, where various rents are remarkably lower and costs and that contributes to dramatically lower costs.   On top of rent all other costs have simply continued to rise.

Restaurants need to cover all sorts of costs that dining in never encounters.   Its a crazy concept.

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Good point about dining in DC, vs relatively inexpensive "ethnic" in the burbs. Actually, I think I could save money eating ethnic in the burbs, given the amount of ingredients, sometimes more obscure ingredients not typically found in the American pantry, and time.

Things like a bowl of hot and sour soup, or pho come to mind.

But, a meat and sides dinner like steak, pork chops, lamb chops, bbq ribs (getting very expensive!) or fish (especially crab cakes which is a kick I've been on this summer) and a couple sides?

I can definitely save lots of money. No doubt.

A couple years ago, I saw entree prices get up to and past the $30 mark and now that seems de rigueur.

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Dining out *and dining healthy* is an expensive proposition - not only that, but you have to *really* know what you're doing to avoid unhealthy restaurant food.

This is an important point -- when you cook at home you are much more in control of the overall healthiness of what you consume than when dining out, and of course the consequences of unhealthy eating are a major driver of health care costs.

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