I ordered “The Everyday”—two eggs, toast, and sides of bacon and sausage. I’d been on the road for three days, eating at rest stops and restaurants on the U.S. Interstates between Philadelphia and New Orleans.
Today, I had plans—a quick breakfast, a tour of the National World War II Museum, a walk along the Mississippi River, and dinner with my daughter on Magazine Street. But the breakfast wasn’t quick. The waitress poured me a cup of coffee and disappeared. When she returned with “The Everyday,” she apologized for the 45-minute delay.
I ate, pushed back from my empty plate, and surveyed my fellow diners, intrigued by the table next to me—a young guy pitching his business plan to an older guy in a blazer, loafers, and Tulane University socks. I waited for a second cup of coffee and the check. I exited the restaurant 90 minutes after I’d sat down.
I had one more night in a hotel, 24 more hours of restauranting. I’d spend the following five nights in a Houston Airbnb, trading restaurants for meals made in an apartment kitchen.
Home cooking
I like eating out. But not every meal. As the time and energy necessary to find restaurants, secure reservations, and review unfamiliar menus increase, the pleasure of dining-out diminishes. And I don’t like the cost.
“The Everyday” cost $13, not including coffee or tip. For a sit-down breakfast, that price is reasonable. After all, a McDonald’s Sausage Egg McMuffin can cost as much a $5.29. But based on prices at my local grocery store, I could cook “The Everyday” for $2.96,* equivalent to four breakfasts at the Hotel Cambria.
My home-cooked version doesn’t include the cost of a chef, waitstaff, dishwashers, or the 8 a.m. bartender waiting for French Quarter revelers to start their day with the hair of the dog. And my estimate doesn’t account for the restaurant’s investments in real estate, an industrial kitchen, and tableware. My comparison is imperfect.
The retirement-spending puzzle
Even so, it’s useful. It can help travelers budget as they choose between hotels and Airbnbs. And it’s a piece in the retirement-spending puzzle that has bedeviled economists.
Economists refer to meals cooked at home as household production—”the production of goods and services by the members of a household, for their own consumption, using their own capital and their own unpaid labor.” Household production is economically invisible. When we eat “The Everyday” at the Hotel Cambria, we contribute to government measures of economic output. When we prepare the same two eggs, toast, and sides of bacon and sausage at home, we don’t.
This difference explains deficiencies in the lifecycle model of consumption, a theory pioneered by Nobel laureate Franco Modigliani. The model assumes that we maintain the same level of consumption, or spending, over our lifetimes. When we’re young, and our income is modest, we borrow to boost consumption. As we age, we finance the same consumption with our rising paychecks and set aside savings for the future. When we leave the workforce, we draw on these savings to keep consumption stable.
The data tell a different story. Using the University of Michigan’s Health and Retirement Survey, researchers Jim Been, Susann Rohwedder, and Michael Hurd conclude that, on average, male retirees spend about 16% less than they did while working. Females spend 6% less.
One interpretation of this difference between theory and reality: Workers have less foresight than the life-cycle model assumes. They fail to save enough, and in retirement, they’re forced to pinch pennies.
A second interpretation: Our foresight is fine. Our savings are consistent with an expectation that we’ll plug the gap between the dollars spent before and after retirement with household production—less dining out, more home-cooked meals. As the University of Chicago’s Erik Hurst explains, “individuals will substitute away from market expenditures toward time spent in home production, including more intensive searching for bargains.”
“Intensive searching for bargains”
This conclusion rings true. I think of my father. He enjoys a good restaurant. Since retiring, however, he has dedicated more time to “intensive searching for bargains,” criscrossing New York City to hunt for the best prices at grocers, green markets, and bodegas. My mother and father make most of their meals at home.
And I think of myself. During the work week, I brownbag most of my lunches, but I still might eat two or three breakfasts, a lunch, and two dinners at a cafeteria or restaurant. My marketplace meals represent a weekly $200 contribution to U.S. economic output.
In my life after labor, those contributions will decline. But I’ll still eat. On most mornings, household production will substitute for what I once spent on “The Everyday.”
–A. Clarke
Note: I take the title for this post from musician and songwriter Dave Frishberg’s “Let’s eat home,” sung in this clip by Rosemary Clooney.
* I base this calculation on prices at a Pennsylvania Wegman’s on January 23, 2024: a dozen eggs ($1.99); 12 sausage links ($4.54); 13 slices of bacon ($4.99); 18 slices of sourdough bread ($6.49).