Tyler Cowen on the economics of fine dining

Tyler Cowen at Marginal Revolution has a piece in today's New York Times on the economics of fine dining: In the Language of Gastronomy, Those Michelin Stars Translate as Dollar Signs.

Perhaps the French complain about McDonald’s because they find it so hard to buy their best food at affordable prices. A meal in a Michelin three-star restaurant in Paris can cost $300 or $400 a person, not including wine.

How could food become so expensive? To answer this and other questions, the inaugural meeting of the Society for Quantitative Gastronomy was held in May in Bordeaux, France. The society, founded by a group of young French economists, is bringing scientific measurement to bear on food markets. Their message is that status and image — not just food — play an increasing role in high restaurant prices.

...The expense of fine dining has been rising for decades. From 1950 to 2005, the prices of the highest-quality Parisian meals — defined by the Michelin dining guide categories “very comfortable” to “luxury” — rose a startling 216.8 percent in real terms, adjusting for inflation. By contrast, adjusted for inflation, regular nonluxury food became cheaper in that period. That’s why we can afford to eat so much. The evidence is from “A Paradigm Change in Taste Industries,” (pdf) written by the French economists Christian Barrère, Véronique Chossat and Florine Livat.