Eat like an economist, dine like a king

Renowned American thinker Tyler Cowen has applied cold financial logic to the business of eating out. Will Dean finds out how we can get the best meals for the least money.

Where's the better place to get a good meal: central London or Bradford? How do you get a waiter to recommend a dish that he's not just been told by his boss to push that day? And where should you eat seafood in a poor country?

The answers, according to renowned American thinker and economist Tyler Cowen, are: the restaurants of Bradford ("it can sometimes resemble a war zone but it's the best Pakistani food I've had"); ask the waiter what the "best" dish is, not what they recommend; and in areas less than 10 miles from the sea (think about refrigeration).

Cowen is known as a fine intellect – Foreign Policy magazine named him the 72nd-most-important global thinker in December – and many will follow his acclaimed blog Marginal Revolutions. His latest book, An Economist Gets Lunch, applies an economist's cold logic to the world of food. If you're interested in how the food and restaurant industries work – and how to exploit those factors for your own good – then Cowen's work is indispensable.

Observations in it range from the anecdotal to the macro. In one story about a good restaurant in Germany, he's sitting next to a squabbling German family who are clearly not enjoying themselves. This, Cowen concludes, is proof that the joint must be good. His logic? If the family is comfortable enough to come here and sulk and argue with each other, they must come regularly enough to see it as a home from home. And the only reason they'd keep coming back? Its good food.

Earlier, on a macroeconomic scale, the book describes the debilitating effect that Prohibition had on American food, ie, the best American high-end restaurants survived financially with help from their highly marked-up bars (as they do now). So when alcohol sales were made illegal in 1920, the restaurants that relied on wine either had to go dry (which didn't help the bottom line or indeed the food, fine wines being a natural accompaniment) or go underground. The dry restaurants lost their customers; the speakeasies had to run the risks of illegality, including "reliance" on the criminal underworld.

As the best restaurants in cities such as Chicago and New York from the period closed, so went the expertise that bled into each city's food culture. This, in turn, led to even fewer good new restaurants opening. The end of Prohibition in the mid-Thirties, allied to a crackdown on immigration into the US, was then followed by the mass food-processing necessities (behold the tinned good!) of the Second World War. From these culinary setbacks, Cowen suggests, American food culture was left behind in war-ravaged Europe.

When it comes to eating abroad there's a brilliant vignette early on. Cowen describes flying to Nicaragua, taking his own cheese and sourdough with him to avoid the aircraft food and – most importantly – to avoid being hungry upon arrival at his destination and thus making a bad or desperate choice, as many tourists do. In Nicaragua, he pays an elderly (hence experienced) taxi driver to take him to find some quintessentially Nicaraguan food and ends up eating beautiful, cheap quesillos (tortillas with cream, gooey cheese, onions and vinegar) for next to nothing (including the extra fare and lunch for the driver).

Ideas such as that don't guarantee cheap meals, but they help to guarantee the best meals. More rules of thumb for choosing where to eat out are equally fascinating.

Take sauce. If you're in a rich Western city, choose a dish with sauce. Your raw materials might not be that fresh (they've been in a fridge for a few days), so the quality of the food will depend on the creativity going into its composition. America is good for this because it attracts lots of creative immigrants. Conversely, if you're in a poor country with not much history of refrigeration then it's likely the culture will be for food to be eaten as fresh as is possible, so that it doesn't go off. Which means, Cowen says, that you should choose "ingredients-intensive" dishes – such as a barely adorned fish, or a plate of cheese and vegetables.

When it comes to value, Cowen encourages selfish rationalism. Look at the staff of a restaurant, he advises. If a place has valets, floor managers etc, then you're to be subsidising the cost of all those (helpful, admittedly) staff with your bill. If a Korean restaurant is staffed by family members helping out mum or dad (or son or daughter) that cheap labour will be saved on your bill.

Look at the cost of drinks, too. "It is easier to find out and remember the price for major items – main courses – than it is drinks," Cowen explains. People who are wealthy enough to go to a good restaurant and order drinks without paying attention to their cost are unlikely to be fazed by the huge mark-ups on wine, beer and Coca-Cola. Restaurants with £15 main courses that cost, say, £11 in raw materials can cross-subsidise the cost of the food with £3.50 glasses of Coke that cost about 20p in post-mix syrup.

The end result is that the canny consumer who goes to a top restaurant can get a brilliant meal for £35 (if they drink tap-water). That meal is then subsidised by the wealthy patrons who don't bat an eyelid at ordering a £100 bottle of wine (which may wholesale for half that). It's not just a good deal for the water drinkers, it's good for the restaurants – the lowered cost of the food dishes (thanks to drinks costs) means less wealthy customers aren't put off. Which means more covers. Which is fine, so long as the water drinkers don't hang around at the valuable table space.

A few other random pointers: the best restaurants in Las Vegas are at the back of the casinos – the owners want you to gamble on your way to the good food; when it comes to subcontinental food, "the more aggressively religious the decor, the better it will be for the food" (less pandering to Western tastes), and Pakistani restaurants that are reluctant to serve alcohol are usually a good bet – it encourages Muslim Pakistani customers who will be more demanding about the authenticity of their food.

Cowen's good on shopping, too: one chapter describes the benefits of embracing a local ethnic supermarket where, as in the Pakistani restaurants, immigrant customers are incredibly well informed about their greens. A lack of knowledge of where things are can also lead to not buying so much junk food and expanding our palates by trying new, unusual products.

And as for expensive kitchen equipment, Cowen advises buying cheap versions of all the basic gear and then, once you work out which items (chef's knife, food processor etc) are used regularly in the "winner-takes-all" market of the home kitchen, invest in high-end versions of those products. And don't fill your kitchen with useless gizmos, either.

All good advice. It has no recipes, few restaurant recommendations and no famous chef names, but An Economist Gets Lunch might be the most interesting book about food you read all year.

'An Economist Gets Lunch: New Rules for Everyday Foodies' by Tyler Cowen is out now (£16.87, Dutton Books)

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