South-Western College Publishing - Economics  
Chill Out and Don't Cook In
Subject Opportunity Cost
Topic Scarcity, Choice and Opportunity Cost
Key Words Consumers, Time, Cost
News Story

The chilled food industry is growing fast. Consumers have mixed emotions, as a study from the UK shows. Frequently, consumers feel guilty because they are being lazy. They also believe that they are paying too much money and that the taste of, and the nutrition in, the food is inferior.

Yet, when seven supermarket dishes were taste-tested by a panel of 25, four dishes--including tagliatelle and potato salad--were actually rated more highly than when made according to cookbooks. The dishes where the home-cooked version was preferred were all spicy meals.

The greatest benefit of convenience food, however, is the time saved--an hour on average for a typical evening meal. Convenience meals, including soup and entree, cost $20 on average. Home-cooked meals were found to cost approximately $11, including ingredients, electricity, and dishwashing. However, including the cost of the home chef's time at $8.50 an hour, results in the cost of a convenience meal rising to $22.50, while the cost of a home-cooked meal increases to $32.

(Updated November 11, 1998)
1. a) Why are people saying that they are paying too much for chilled convenience foods?
  b) What is their definition of cost?
2. a) In spite of this, people continue to buy convenience foods. Why?
  b) What is their definition of cost?
3. Which definition of cost does an economist prefer? Why?
Source David Blackwell, "Consumers Warm to Chilled Food", Financial Times, September 26/27, 1998

Return to the Scarcity, Choice, and Opportunity Cost Index

©1998  South-Western College Publishing.  All Rights Reserved  |   DISCLAIMER