Supply-side gastronomics: does low rent and cheap labor mean good food?

The Dish has put up an Ask Tyler Cowen Anything feature, focused on his new book, An Economist Gets Lunch.  Which reminds me: I read the excerpt or precis in The Atlantic, Six Rules for Dining Out, and found those rules bizarre.  I want to have a little fun with them. In most cases my "objections" are a matter of taste (literally) or sensibility, but I have a stray logical or economic quibble or two to air as well. So here we go:

In the Fanciest Restaurants, Order What Sounds Least Appetizing 

At fancy and expensive restaurants (say, $50 and up for a dinner), you can follow a simple procedure to choose the best meal. Look at the menu and ask yourself: Which of these items do I least want to order? Or: Which one sounds the least appetizing? Then order that item.

The logic is simple. At a fancy restaurant, the menu is well thought-out. The kitchen’s time and attention are scarce. An item won’t be on the menu unless there is a good reason for its presence. If it sounds bad, it probably tastes especially good.

My counter-logic is simple too. I'm a residually fussy eater (much worse as a child). There are a lot of textures, colors and smells that I don't like in food.  If an item sounds unappetizing to me, it's almost guaranteed to prove so.  Which probably explains why I don't eat in $50+/person restaurants.

To be fair, that means, in a sense, that Cowen is not addressing me. He's addressing people who are willing to work to find and appreciate the finest cuisine. On the other hand, when it comes to food, we're all experts. No one is really uninterested. I eat out a fair amount and want to enjoy the food. And that advice won't work for me.

Beware the Beautiful, Laughing Women

When I’m out looking for food, and I come across a restaurant where the patrons are laughing and smiling and appear very sociable, I become wary. Don’t get me wrong. Having fun is a fine ambition, but it’s not the same thing as eating good food. Many restaurants, especially in downtown urban areas, fill seats—and charge high prices—by creating social scenes for drinking, dating, and carousing. They’re not using the food to draw in their customers..

I also start to worry if many women in a restaurant are beautiful in a trendy or stylish way. The point is not that beautiful women have bad taste in food. Instead, the problem is that they will attract a lot of men to the restaurant, whether or not the place serves excellent food. And that allows the restaurant to cut back on the quality of the food. 

I wish the text here (as opposed to the subhead) were actually phrased as cited in Time Moneyland (and on the Dish):  "he advises foodies to avoid spots filled with 'beautiful, laughing women.'” Then I would really go to town with it, because personally I would prefer to eat marginally less stellar cuisine while surrounded by beautiful women than dine on the finest while surrounded by grumpy old men (or shouting Chinese, whom Cowen later claims to actively seek out).  But in fact I more or less agree with Cowen here, because I can skip the "trendy or stylish way" of being beautiful, and in fact I don't like loud and overpriced places where people dress unduly trendily. I will stick with my faux quibble, though: practically every restaurant in New York I eat in is filled with beautiful women, albeit not dressed with extraordinary trendiness, and not laughing any more than any typical crowd of diners.  And that is a major draw, faithful monogamist though I be. It puts me in a roseate glow more surely than any glass of wine.

Get Out of the City and Into the Strip Mall

If a restaurant cannot cover its rent, it is not long for this world. According to a 2005 study, more than half of all restaurants close in the first three years of operation, so this is not a small problem. You can lay off kitchen staff when times get tough, or substitute the cheaper tilapia for the fancier and scarcer Chilean sea bass. But rent is a fixed cost, meaning that you have to pay it every month no matter how many customers walk through the door and no matter what ingredients you are serving.

Low-rent restaurants can experiment at relatively low risk. If a food idea does not work out, the proprietor is not left with an expensive lease. As a result, a strip-mall restaurant is more likely to try daring ideas than is a restaurant in, say, a large shopping mall. The people with the best, most creative, most innovative cooking ideas are not always the people with the most money. Many of them end up in dumpier locales, where they gradually improve real-estate values.

Tyler Cowen is crazy. Strip malls are repulsive.  And for that matter, who expects to find great restaurants in a large shopping mall?

Okay, let's be fair again. Cowen is speaking from experience:

I love exploring the suburbs for first-rate ethnic food. Many people consider suburbs a cultural wasteland, but I am very happy searching for food in Orange County, California; the area near San Jose; Northern Virginia, near D.C.; Somerville, Massachusetts; and so on. I don’t always pre-Google to find the best place, and I don’t keep tapping on my iPhone. I drive around and keep my eyes open for dining establishments likely to follow the economic rules for good, innovative, and affordable food.

I have never "explored a suburb," by which I gather he means cruising the roads lined with strip malls in search of serious cuisine (though I live in a suburb and have tried most of the local restaurants in town and a couple of neighboring towns).  And I can't recall a single memorable meal I've ever eaten in a strip mall -- decent, yes, but not memorable. But then, I've never tried.

Side tip: When in Manhattan, choose restaurants on the streets over those on the avenues.


Manhattan’s avenues tend to have higher rents than its streets. Given the long, thin shape of the island, the north-south avenues carry more vehicular and foot traffic. A Fifth Avenue spot will be seen by most city residents and many visitors at some point or another. A storefront on 39th Street will be seen more exclusively by neighborhood locals and people who work in the area. If you are stuck in Midtown, and you want good, cheap ethnic food, try the streets before the avenues. Opt for narrow passageways rather than broad ones. That neat Korean place can make ends meet on 35th, but it would not survive on Fifth Avenue. No matter where you are, turning just a bit off the main drag can yield a better meal for your money.

Let's say I'm following this advice and sticking to side streets in midtown. How to I "opt for narrow passageways"? All midtown side streets are the same width -- I once asked an architect I commute with about that, because "Korean Way," on 32nd between 5th and Broadway, feels narrow -- and he told me the widths don't vary.  More broadly, what Cowen says is, I think, true of the avenues in the center of the island (on an east-west plane) but not so true as you head west or east. Most of my favorite restaurants in Manhattan are on 8th and 9th Avenue.  But not to be provincial, I have a more fundamental beef with this tip, which also applies to another one:

Exploit Restaurant Workers

Quality food is cheaper when cheap labor is available to cook it. In a relatively wealthy country like the United States, cheap labor can be hard to find. We have a high level of labor productivity and a minimum wage; in some cases even illegal immigrants earn more than the legal minimum. But one obvious place to find cheap labor is in family-owned, family-run Asian restaurants. Family members will work in the kitchen or as waiters for relatively little pay, or sometimes no pay at all. Sometimes they’re expected to do the work as part of their contribution to the family. The upshot is that these restaurants tend to offer good food buys.

Here, at last, is a serious economic question: why does Cowen assume that overhead saved on rent or labor will be plowed into food quality?  The premise is that restaurant competition is relentless, which is true. But restaurants by no means compete exclusively on the basis of the quality of the food's ingredients or its preparation.  Cowen knows this as well as anyone -- in fact, probably better than most anyone, since he's made a personal quest of avoiding paying for the elements of restaurant allure that he doesn't value. He seems to assume, though, that the elements of faux value will all be clustered toward the higher end, and I don't think that's true.  Convenience, a reasonably pleasant ambiance, and catering to unsophisticated taste at moderate price can be enough, or more than enough.

Also, on a serious note, there's been trouble in New York with "family-owned Asian restaurants" exploiting the compatriots hired to deliver the food.  Ground zero was my absolute favorite Vietnamese restaurant. "Exploiting cheap labor" is not always a matter simply of supporting strict parents. If a great restaurant is too cheap to be true, something may be amiss.

With regard to "exploiting" low overhead generally: I suppose the key element is that Cowen is willing to hunt. The food at nine out of ten strip mall Chinese joints may taste alike; he will sniff out the extraordinary tenth. By definition, a hidden gem will be hidden, and a bargain will not be found on the fanciest avenue in town. 

But for me, half the fun ain't getting there, if "there" is out among the fast food joints and big box stores.
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Another beef with Tyler Cowen:  Slo-mo gro on the plateau: Tyler Cowen's general theory of American malaise