Earlier quoted context omitted.
> If land is incredibly expensive and one intends to eat most of their meals out, it doesn’t actually make sense to rent a full kitchen. It is hard to beat the economies of scale of a restaurant, as much as the "you only need to factor the cost of raw food" camp like to tell otherwise. From a purely economic perspective, a kitchen at home, when other sources of food are widely available, is tough to justify. From a w…
I worked as a line cook in college. The place I worked was in a HCOL city, but nowhere close to SF. Our general rule was that items should sell for about 4x the cost of ingredients to cover all overhead. 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 ra…
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.