Do vegetarians get ripped off at restaurants?
As a vegan who enjoys eating out, I spend a lot of my spare time tasting the newest offerings at London’s finest veggie friendly establishments. While I love experimenting with new dishes at restaurants, I quite often get the sense that vegetarians and other ethical diners feel they are getting a little bit ripped off when eating out. As an economist, I spend a lot of time thinking about markets and how prices are determined. Inspired by Tyler Cowen’s recent book ‘An Economist Gets Lunch’, I thought I’d put my economic analysis skills to good use and attempt to better understand why, vegetarians get ripped off when eating out, or at least feel like they might be getting ripped off.
My personal experience tells me that vegetarian options at restaurants generally tend to be a little bit cheaper than the non-vegetarian dishes, but the difference in price is often smaller than one might expect given the difference in cost of the respective ingredients.
Unfortunately, I don’t have time to trawl through 1000s of menus to look at how restaurants price their foods to confirm whether there is a strong evidence base. But I thought I’d highlight the fact that at Pizza Hut, the price of a large vegetarian supreme (which has mushrooms, mixed peppers, onions and tomatoes as toppings) is the same price as a large supreme pizza (which has all the ingredients of the veggie supreme plus pepperoni and beef). The price of additional toppings on a large pizza is fixed, regardless of whether you are adding onions and sweetcorn (which I imagine are very cheap) or chicken and beef (which I’m sure a lot more expensive and more filling). At Pizza Express, the Giardinera, which I’ve found to be the most popular pizza among veggies that I know, is the most expensive option of all the classic pizzas.
My analysis of the supply, demand and pricing of vegetarian food at restaurants suggests that vegetarians probably do end up paying a more, and not just because the price of vegetarian dishes at restaurants doesn't always reflect the cost of ingredients.
Why prices of vegetarian dishes in a-la carte menus may be higher than what would be expected given the cost of ingredients
1) Restaurants can get away with charging higher prices for vegetarian dishes because demand is inelastic
From the demand side, I think the demand for vegetarian food is relatively inelastic. That is to say, that vegetarian customers are less likely to be price sensitive than the average customer, and so a restaurant might be able to get away with charging them more.
Why might this be so?
One reason is that vegetarians are more fussy about what they eat, in the sense that they won’t eat meat. By setting price differentials high enough, a restaurant could probably incentivise many omnivores to order a vegetarian dish. But even if the price of a vegetarian dish was triple that of a non-vegetarian dish, you couldn’t persuade most vegetarians to order meat (that said, they might leave a restaurant in outrage if you charge them triple).
A second reason is that vegetarians generally have less power to discrminate. When a group of friends get together to go out and eat, the chances are that there will be only one or two vegetarians in the group. If the decision about where to eat is based what the majority want, the chances are that it will be picked because it caters well for omnivores, not because it caters well for vegetarians. Vegetarians often cause enough trouble to their friends at get togethers with their special dietary requirements, and if they kick up a fuss about the poor choice at a restaurant or the price, it is likely that they will delay everyone elses meal and just cause themselves embarrassment. So even if they feel like they are getting ripped off, vegetarians quite often may be prepared to take the hit.
2) Chefs may perceive vegetaran dishes to be more costly than they actually are
With exception to a special few, I imagine that most chefs at restaurants specialise in meat dishes, not vegetarian ones. And if remarks by celebrity chefs are anything to go by, many of them may even dislike vegetarians and the need to create imaginative vegetarian dishes. If this is the case, chefs may wrongly perceive vegetarian dishes to be more costly than they actually are (because they see them as hassle), and end up charging more for them as a result.
3) Labour costs also need to be factored in account
I’ve heard that the main cost to the restaurant isn’t actually the cost of the ingredients, but the labour cost of preparing the food and serving the food. I also think it is reasonable to assume that the cost of preparation would be similar for both vegetarian and non vegetarian dishes. Suppose the labour cost of producing meal is £4, the cost of ingredients for a veggie dish is £2 and the ingredients for a meat dish £3. Knowing that the ingredients in the meat dish are 50% more expensive, a vegetarian may feel ripped off if the final difference in price is only 15%. But once labour costs and overheads are taken into account the cost of making the meat dish is only 17% more than the veggie dish (£7 vs £6).
4) Some vegetarian ingredients may actually be quite expensive
Although vegetarian dishes based on grains and lentils are likely to be very cheap. Any dishes which are based around fresh vegetables may actually be quite expensive. Peppers for example, cost about 80p a piece in supermarkets (though I acknowledge restaurants probably get them cheaper than this). While these seems cheap, it actually works out to about £8 a kg. And on a calorie for calorie basis, peppers and some other fresh vegetables actually work out slightly more expensive than premium steak which costs £20 a kg and quite a bit more expensive than economy frozen chicken. So if a restaurant uses lots of fresh Mediterranean vegetables and wild mushrooms (as opposed to carrots and onions) in some of its vegetarian dishes, the cost of ingredients may actually be higher than the average vegetarian may think.
In addition, while meat can be frozen, many vegetables are highly perishable and deteriorate in taste/qualtity in the freezing process - so vegetables may introduce costly supply chain management issues for a restaurant.
Why vegetarians often feel like they are paying more, even if vegetarian dishes in a-la-carte menus are cheaper than non vegetarian dishes.
1) Veggies lose out when splitting the bill with non-vegetarians
Vegetarian dishes tend to be a little bit cheaper than non-vegetarian dishes, and while non vegetarians are often keen to try the vegetarian dishes, the vegetarians can't do the same back. If a group of friends decide to split the bill equally, vegetarians will often end up paying more than what they should given the price of the dishes that they ordered.
2) Veggies lose out on fixed price set menus
Many restaurants require large groups to have fixed price set menu, where the price is the same regardless of how expensive the dishes are to make or whether they are vegetarian or not.
3) Vegetarians often miss out on "daily specials"
Many restaurants do a "dish of the day" or a "daily special" which is made in large quantities and offered at a discount to a-la-carte price. These rarely tend to be vegetarian dishes, so vegetarians quite often miss out on special offers.
4) Vegetarians with special requirements lose out when modifying dishes
Vegetarians with specific requirements (such as those who don't eat eggs or don't eat dairy products) often end up losing out when asking restaurants to modify dishes. Restaurants are often more than happy to remove ingredients (such as cheese), but very rarely replace the removed ingredients or offer a discount.
..,but maybe vegetarians don't always get ripped off.... cultural differences may offer an explanation...
Everything said and done, I tend to find I feel like I’m not getting ripped off when eating at asian food restaurants. Many of these restaurants have a basic price for a dish (a green thai curry for example) and tend to charge a different price on depending on what type of meat the customer wants, if any. Tofu, as a meat substitute, is typically the cheapest option, and beef is typically the most expensive, with chicken falling somewhere in between. Given that many of these dishes are identical apart from the meat used, I find that the difference in price often quite strongly correlates with the difference in costs of the ingredients. If anything, vegetarians might actually get a slightly better deal in these restaurants. Tofu is actually quite expensive to buy in supermarkets and health food shops (the price per kg is often comparable to meat), but works out quite cheap at Asian restaurants.
I suspect that this difference might be explained by how the markets for vegetarian foods in restaurants evolved in the East and the West. In the East, I imagine that incomes were were low for most people, and the ability to eat meat was a premium luxury that people could only afford once in a while, not every day. For that reason, most dishes would have been designed with a low-cost vegetable base, and those who could afford to pay for meat would be able to get meat added in at a premium. In the West, where restaurant food is likely to have evolved over a longer period during which people had higher incomes, I suspect it would have been the opposite. Most dishes found in Western restaurants would have been designed around the meat, with the need to introduce special vegetarian and vegan options only a relatively recent phenomenon.
If you have any other thoughts on the pricing of vegetarian/vegan food at restaurants, or disagree with my analysis, I'd be grateful to know what you have to say. Please e-mail me at sagar[at]jainvegans.org.









