Analytics

 Investment Office

Selecting relevant market observations

Investment Thoughts
Macro Observations
Capital Markets
Markets in History
Beyond Finance
Quotes on the Fly
Chart Gallery
Academia
Coffee Chronicles
Archives
Asset Management
Pension Funds
Family Offices
Wealth Managers
About
Disclaimer
   Investment Thoughts - Chart Gallery
They say nothing beats a home-cooked meal
Comparing price inflation of food at home and away from home

 

 

The graph shows the evolution of two price indexes: food consumed at home and food served in a restaurant. It’s striking how the price of food served to you has kept increasing, while the price of food you prepare yourself has either increased more slowly or even decreased. In fact, the difference between these prices has increased by 61% over the sample period, meaning that the ratio of restaurant food prices to home food prices is 61% higher now than it was in 1953. What do we make of this? After all, the basic ingredient for both is the same: agricultural products. The difference is that restaurant meals also include a substantial service component: Other people prepare the food and serve it to you. While agriculture has benefited from big-time productivity enhancements, the same cannot be said for the manual labor provided in a restaurant. As real wages increase, the kitchen and wait staff become more expensive more quickly than the goods they prepare and serve, which is why our restaurant bills grow more quickly than our grocery bills. To be fair, we don’t usually pay ourselves to do our own grocery shopping, cooking, serving, and dishwashing. Or, for that matter, give ourselves a 20% tip.

 

The FRED® Blog, February 2, 2017-Christian Zimmermann

05.02.2017


 

Themes

 

Asia

Bonds

Bubbles and Crashes

Business Cycles
Central Banks

China

Commodities
Contrarian

Corporates

Creative Destruction
Credit Crunch

Currencies

Current Account

Deflation
Depression 

Equity
Europe
Financial Crisis
Fiscal Policy

Germany

Gloom and Doom
Gold

Government Debt

Historical Patterns

Household Debt
Inflation

Interest Rates

Japan

Market Timing

Misperceptions

Monetary Policy
Oil
Panics
Permabears
PIIGS
Predictions

Productivity
Real Estate

Seasonality

Sovereign Bonds
Systemic Risk

Switzerland

Tail Risk

Technology

Tipping Point
Trade Balance

U.S.A.
Uncertainty

Valuations

Yield