Subjectively, I don't think that cooking at home is a "luxury". Maybe being a foodie is an upper class thing given the extra cost and time investment associated with it, but historically huge chunks of the middle class have cooked at home for a large chunk of their meals. Generally speaking only the lowest economic strata of the working poor depend heavily on fast & packaged food, and that's largely a factor of both time and ingredient availability. If you're working two or three jobs or live in a food desert, you're not going to cook at home no matter what the unit economics are.

That being said, I do have a general theory about high COL businesses. After moving out of our high COL city (Santa Monica, for the record), we've started building out a home gym and programming our own workouts. What we realized is that while our old gym provided a lot of knowledge and social structure, the primary service they offered was land and equipment. They were able to charge a premium because we literally couldn't afford enough land to put the equipment. Now that we live in a lower COL city with a large garage, the financial balance points towards it being cheaper to just buy all the equipment rather than paying for a gym membership. At the extreme end of land cost, I can see this even applying to kitchens too, since a good kitchen takes up a fairly large portion of an apartment.

Please define “massively” for us. It sounds like you were eating larks tongue in aspic and are now buying year-old potatoes at the Latvian coop. Remember, some in an international audience may have done just that at some point. Is that what happened?

Wonder if a functional kitchen should be thought of as an expense-management device. No matter what the financial situation, in the US without a kitchen you can always find something to eat to keep body and soul together, but with a functional kitchen you can always eat something both tasty and healthy (if you can cook). You can choose to cook if you have the cash; you may need to do that if you don’t. The fact that you always can is a very consoling fact in rough economic times.

Whoops, my bad!

Due to the step nature of purchasing food, the break even points change depending on exactly which meals we're talking about dining out for. The more you eat out, the higher the cost per home cooked meals due to loss of economy of scale and spoilage.

My wife, the keeper of the budgets, calculated that the break even point for work lunches was $11 a lunch. This is doable, but it basically means relegating yourself to low end fast food. In the area where I lived (Southern California) that put even Chipotle out of reach for my preferred configuration. There are certainly places that can reliably deliver 800 calories for less, but that'll cost you in the long run in different ways.

> Wonder if a functional kitchen should be thought of as an expense-management device. No matter what the financial situation, in the US without a kitchen you can always find something to eat to keep body and soul together, but with a functional kitchen you can always eat something both tasty and healthy (if you can cook).

I think that's a pretty good way to think about it. As GP has pointed out you do need to purchase an actual kitchen too, but I think that the cost is fairly marginal compared to buying a home in most markets.

> You can choose to cook if you have the cash; you may need to do that if you don’t. The fact that you always can is a very consoling fact in rough economic times.

If one wants true consolation in rough economic times, buy a chest freezer. Nothing provides emotional security like a hundred pounds of meat and vegetables frozen in the garage.

Is that because, based on other comments here, you're already invested in a kitchen and, as a result, are forgetting to factor in that substantial cost? But that would be like if you owned your own silicon fab. You would no doubt also wonder how anyone could afford to buy their processors from Intel for hundreds of dollars when you can make your own for pennies. But you're not actually making them for pennies when you need to lay the capital upfront.

> Subjectively, I don't think that cooking at home is a "luxury".

The luxury isn't cooking. The luxury is being able to have a large room full of machinery dedicated to preparing meals for, on average, 2.5 people. These days, average people can barely afford living spaces as-is. That room adds to the cost substantially and is not likely to be recouped against eating out, unless eating out means eating at places that are selling entertainment alongside food.

It is true that the typical home kitchen can be more cost effective than food entertainment, but that's only because your home kitchen does not have to provide the entertainment portion. I do not see these being reasonably comparable when talking about the cost of prepared food. Once you add the cost of equivalent entertainment at home, the food entertainment restaurant looks pretty cheap again.

> Generally speaking only the lowest economic strata of the working poor depend heavily on fast & packaged food

Generally speaking, the poor have to buy used houses that already have kitchens for a lot of historical reasons. They have little opportunity to not become invested in the means of production, even when it is not ideal from a purely economic point of view. There are exceptions of places without kitchens, as mentioned earlier in the thread, but they are typically only found where land values are high, where the cost of keeping an existing kitchen is higher than repurposing it.

The wealthy, who are most likely to build new houses, that will one day be sold to the poor, want the luxury of having a kitchen even when it is not economically sound, and so the cycle continues.

So, my kitchen has a range, sink, dishwasher, and full-size refrigerator. It is small but it is a full kitchen. It is the smallest "room" in my apartment; I probably pay a few hundred dollars a month for it. The cost difference between cooking at home and eating out makes up for that in a couple of weeks for me.

Kitchens aren't that expensive.

You're right that ignoring the cost of a kitchen discounts the cost of cooking at home, but I think you're drastically overestimating the cost of purchasing a kitchen. In another thread you mentioned $60,000 for a kitchen, a number which I think is way too high. I suspect that this is a case of the average being dragged up by the outliers. After all, high end kitchens can get very expensive, but we're not looking at high end income earners.

So, let's look at it from the perspective of someone buying a used home. Let's assume that they're buying basic, at median prices and reasonable sizes.

A basic kitchen remodel is somewhere in the neighborhood of $24,000[0][1], including all new cabinetry, countertops, flooring, plumbing, and appliances. Presumably installing a new kitchen in a new building is significantly cheaper since that is less labor intensive than remodeling. The median house costs in the neighborhood of $100/sq. ft[2], with a typical small kitchen being anywhere from 70-100 square feet. Even assuming that the cost/ft doesn't already include the kitchen itself, we have a bare minimum price of about $34,000 for a basic kitchen fully installed.

(This does not account for the fact that the $103/sq. ft. number includes the kitchen that comes with the house, and thus we are double counting some costs).

A 30 year mortgage on $34,000 is $441.76, which is $5.89 a person a day for a 2.5 person household, or $2.94 each for lunch and dinner. So in order for a basic kitchen to pay itself off, each meal must be at least $2.94 cheaper than what you would pay dining out. This is obviously quite hard to do if you're buying the cheapest calories available, but trivial if your typical meal is more expensive than say, Chipotle.

And of course, this is a pessimistic analysis. As you've mentioned, your typical American is purchasing a used house, which absent a growing market means that they're financing the depreciated value of that kitchen.

Now if the cost per square foot was closer to $850 per square foot, a not unreasonable estimate for San Francisco proper, one would quickly question whether the $59,500 was worth it for the space of a small kitchen alone.

> The luxury isn't cooking. The luxury is being able to have a large room full of machinery dedicated to preparing meals for, on average, 2.5 people. These days, average people can barely afford living spaces as-is.

I would argue that if having a kitchen is such an obvious luxury as you propose, we'd see more housing move to eliminate it. Instead our evidence is that you have to be extremely far up the COL curve before having a kitchen is no longer worth the space. Even in incredibly crowded markets like NYC it is more common to see apartments give up a separate bedroom before falling back to a half kitchen.

SF is certainly the outlier in terms of cost, so if any place in the US was going to have a local trend of abandoning full kitchens or even half kitchens, it would be there.

> Generally speaking, the poor have to buy used houses that already have kitchens for a lot of historical reasons. They have little opportunity to not become invested in the means of production, even when it is not ideal from a purely economic point of view.

Yes, the poor do have to buy kitchens. But they also buy cheap kitchens, which continues to tilt the equation towards cooking being cheaper. Instead it appears like time and energy are actually what drives people towards dining out, not cost.

0 - https://www.homedepot.com/c/cost_kitchen_remodel

1 - https://www.homeadvisor.com/cost/kitchens/remodel-a-kitchen/

2 - https://www.fool.com/the-ascent/research/average-house-price...

I'm a salaried employ with no expectation of overtime, so my opportunity cost to cook for myself is essentially $0/hr, but even if I factor in a fairly reasonable $15/hr for my own labor, I'm still easily under 4x raw input cost for most dishes, which makes sense since I don't have to pay (or already pay regardless) other overheads like rent, taxes and FOH staff.

One is that $15/hr is a dramatic underestimate of the opportunity cost for many of the people who would otherwise be eating out. Minimum wage in Mountain View & Sunnyvale is $16.05/hour. My wife & my salaries, if converted to hourly, would be several hundred / hour. We cook at home because we're salaried and so don't actually reap that opportunity cost in cash, and because the transaction costs of finding a restaurant, driving to it, and waiting for food dwarf the food preparation time (indeed, if we're already in the car near food we're far more likely to eat out). Which brings me to...

Transaction costs for meals out are really high, largely because of the automobile. Restaurants in the U.S. are spread out, with large amounts of parking that the restaurant owner needs to pay for. Because you have to hop in the car to go elsewhere, you're far more likely to wait for a table rather than find a less full restaurant. That means restaurant owners need to build in waiting space (more rent), and host staff (more labor), and carefully predict staffing needed (more labor). It means patrons waste time waiting for a table, and then ordering, and they're locked into their choice of restaurant once they show up, which means that they're more inclined to research options carefully before picking where to eat.

I visited my in-laws in Taiwan last year, and the food culture & economics are dramatically different there. Restaurant meals out are the equivalent of $US4-5. Most restaurants are what we'd call fast-casual: you walk in, the menu is posted behind the counter, you order, get your food, and sit down at a small number of tables. When you're done you wipe up your area and bus your food yourself. The whole restaurant is usually family owned & operated; there might be 3-4 employees total. If the place is full, you walk next door to the equally-good restaurant there. ("Destination" restaurants like Din Tai Fung do exist, and they charge American-ish prices of $20-50/plate.) This is all within walking distance of your apartment, so when you're hungry you take the elevator down, walk outside, and find someplace, with minimal search or transportation costs. As a result, there's a big culture of eating out, and most people have just a kitchenette and don't use it for many meals.

You can’t say that your opportunity cost is $x and then also state you did not have a choice to earn $x. They are contradictory statements. Unless you are a robot capable of working as much as you want with no downtime, this type of calculation make no sense.

Not to mention the costs of eating out include unhealthy meals, among others.

The rest of my post was about specific ways that the behavior of individual firms (using myself as an example) may diverge from what the economic model predicts, specifically because of transaction costs. That and a counterfactual (Taiwan) where these transaction costs don't exist, to illustrate how behavior then converges on what economics would predict.

It really depends what one eats. If one is okay with eating widely available low cost foods, then yes, commercial kitchens are more efficient. For example, Burger King here will sell you a three whopper, three cheeseburger, and three fries family meal for $14.99 (silicon valley prices, likely lower in the rest of the nation). Pretty hard to compete against that if one considers the cost of making a burger from scratch and cleaning up the mess from deep frying at home.

But fast food is a low margin high volume business. Looking at higher margin items, like what you'd eat in a steakhouse, the economics of a kitchen change dramatically. For example, I recently bought four USDA prime tenderloins from Costco for roughly $58 total. Each one of them, plated and served, would be $35 to $50, excluding taxes and tip. Given that cooking those is pretty easy (either with just an inexpensive cast iron pan and oven, or using sous vide if one wants to get fancy) and takes a grand total of five to ten minutes to make, then the kitchen becomes a much better value proposition.

And that's saying nothing of people with restrictive diets, where oftentimes it's just easier to cook at home. Depending on which friend I'm dining with, the restrictions might be celiac (strict no gluten, not fad diet no gluten), low/no carb, pescatarian, vegan, religious dietary restrictions, nut allergies, and so on. Sometimes the combinations basically exclude most of the restaurants out there, and at that point, it's easier to cook at home than go out only to be restricted to a few items in the menu.

I'd be interested in seeing your math on the subject, and it probably depends on location and at what rate do you "bill" your time, but restaurants have a lot of overhead ( property, staff, taxes) that offsets economies of scale.

Even without going all-in with cheap foods ( like rice or potatoes), I can't imagine eating out in similar quality and quantity being cheaper than cooking it yourself ( again, depending on how you count your time spent).

Of course McDonald's cheapest items will be cheaper than making yourself lobsters, but that's not really a fair comparison.

The average cost to install a kitchen is around $60,000. If we assume a rate of return of 5%, that is $3,000 per year right there that the money needs to provide to justify it being invested in a kitchen and not invested elsewhere. That covers more than half of the individual restaurant cost right there and leaves only about $4 for everything else. Does $4 even begin to cover the time it would take you to make your own Big Mac meal (I agree that it isn't fair to compare with lobster) at home once, let alone twice? While the average home has 2.5 people, not just one person, we've only just scratched the cost of having a kitchen. We still have ingredients to pay for, the opportunity cost of occupying the land, electricity/gas, taxes, repairs and maintenance, etc. You're blowing your $30 budget in pretty short order. Okay, if you are one of those TV families with 14 kids, then perhaps you can gain some economies of scale at home.

Yes, if you've already invested heavily in having your own kitchen, then you can become more price competitive with a professional kitchen. Though that is true of a lot of things. After you've invested heavily in having your own silicon fab, you're going to laugh at how much Intel is charging for their chips as well. The means of production comes with a cost, though. And while it may be a sunk cost for most, it should not be ignored on that basis.

The real world is complicated, though.

1. If you're buying a used home, as most people do, they rarely come with silicon fabs but virtually always come with a kitchen, leaving you little choice in whether or not you want to invest in one. If land is cheap, it usually doesn't make sense to divest yourself from owning a kitchen. However, if land is expensive, then the calculus changes. When land is expensive, the land occupied by a kitchen can be put to more productive use that outweighs the investment you have already made.

2. Because most people are invested in home kitchens already, restaurants aren't optimized for providing food you want to eat on a regular basis. Eating a Big Mac twice a day, every day isn't sustainable. But at the other end, non-fast food restaurants focus on providing entertainment. Your kitchen can compete with them as your kitchen doesn't have to be entertaining. To be fair with them, we would have to include the cost of having a living room, TV, Netflix account, etc.

An ordinary home kitchen? That is ... quite a lot.

I am in a different part of the world, but I still managed to equip a home kitchen with reasonable-quality appliances (no scraping the barrel, mostly Bosch and Whirlpool) for some 4000 dollars in 2019.

Unless the talk is about some big ass mansion, I cannot imagine spending 60 000 USD on a kitchen, the very price of the materiel used does not add up to even tenth of that value even if you choose mid-range stuff.

You can have a nice 300 x 60 cm wooden counter for like 200 USD.

And every room would be equally judged against its economic value. It could very well be that having an maintaining your TV room is more expensive than going to the movie theatre as well. If you were designing a domicile based purely on optimizing cost, as posed earlier, it is very likely that it wouldn't be anything more than a small bedroom, with everything else more cost effectively provided by outside third-parties at scale.

But there is, of course, more to life than numbers. A small bedroom and nothing more does not seem like an overly desirable place to live. Being able to watch TV at home is nice. Being able to cook at home is enjoyable. However, the topic is what it is and as a result those factors don't matter for the purposes of this particular discussion.

Yeah, i assumed so. Eating Big Macs is... let's say suboptimal. If you eat only that, you'll probably have all sorts of health issues. When counting actual food, fresh and with vegetables and all that, it's slightly more expensive than Big Macs. Around here, cheapest option for a decent actual meal is ~8-10/eur/person.

> The average cost to install a kitchen is around $60,000

Seriously? In France fancy kitchens are at 10k, "starter" ( recommended if you're going to let or for first buy) are at 2k, everything included. I guess if you start from $60k, you need to cook quite a bit more to make it financially viable.

And that's if you have close to no dietary or allergic restrictions.

0 - https://www.homeadvisor.com/cost/kitchens/remodel-a-kitchen/

Same here, but always coupled with a value of entertainment at that price point. You cannot directly compare the entertainment experience to your home kitchen, as already mentioned. You, at least, would have to include some of the cost of your living room, TV, Netflix account, etc. or whatever analogs of entertainment you have in your home. At which point 10 eur is going to look pretty cheap.

> "starter" ( recommended if you're going to let or for first buy) are at 2k, everything included.

Whoa. I'm not sure you could even put up one wall of a kitchen for $2k in North America. Maybe if you're buying a stove and cooking under the stars you could get in for that amount. That's not what anyone I know would call a kitchen. Definitely not what is being referred to as a kitchen in this thread.

For quick and dirty estimates, it's reasonable to double your cost of materials to get a total job cost. Framing is going to be less than $1000 in lumber (probably a lot less) for an apartment kitchen and that's at today's historically rather high lumber prices. Electrical is going to be maybe $500 at most. I'm a lot less versed in plumbing so I can't estimate that off the top of my head, but lets say that it somehow comes out to as much as the framing and electrical combined. Adding all that up and doubling it brings us to $6000 in construction costs.

All in that's ~$10,000.

$2000 isn't realistic if you're counting all materials from the ground up, but $60,000 is a comical number. That might be the average cost of your typical McMansion kitchen with high end appliances, but it's not representative of what it's going to cost to build a kitchen in a small to medium sized rental apartment.

Kitchens certainly don't magically spring up from the ground after the spring rain. You naturally would have to count every last input cost for any kind of meaningful comparison. The restaurants certainly are when pricing their food.

> Adding all that up and doubling it brings us to $6000 in construction costs.

For, say, a 150 sq.ft. kitchen (the average sized kitchen)? Which means if we theoretically placed 10 of those rooms side by side, totalling 1,500 sq.ft., you could build what is essentially an entire house for $60,000? I realize that doesn't include all the fixtures, but it still seems quite low. Labour must be pretty cheap where you're from.

I don't know what to tell you except I have experience actually doing this. A full house needs a roof and foundation, which I neglected in my original estimate. I don't have time to work out an estimate on an entire roof and divide it to assign partial cost to the kitchen, but I doubt the roof and foundation together are going to add any more than anther $6000 for the kitchen alone. The overarching point is that we're still a long way from $60,000 for a kitchen.

Seems to be a lot of that going on around this topic. If you don't count every last penny, you're not being fair to what it costs to cook at home. I get it, if you only count the receipts of your rice and bean purchases, it will be pennies a day. That's not your cost, though.

> The overarching point is that we're still a long way from $60,000 for a kitchen.

I did mention that labour might be cheap where you are from. Prices can swing wildly from place to place. Labour is, by far, the largest cost in the construction, so it wouldn't be too surprising to see the cost of the final product swing widely alongside that.

The good news is that I'm not sure the exact amount matters much at the end of the day as if labour is cheaper, restaurants will also be able to produce food cheaper. No matter how you slice it, you're just not going to be able to compete with the economies of scale of a restaurant.

But ultimately it doesn't matter as people don't cook at home for rational economic reasons, they cook at home because it is an enjoyable activity. You definitely don't have to sell me on that. I love cooking. I would never trade my kitchen for an extra dollar in my pocket.

Could you expand on this? I have no idea what you mean. Aside from some niche restaurants like Benihana, I can't think of any sit down restaurant at any price point that provides any more entertainment than McDonalds.

None of that has to do with the food in any way. I assume this is what the parent poster means by “entertainment”: all the reasons you would go to a restaurant other than food.