Archives for posts with tag: restaurants

A story in Saturday’s Financial Review ($) was relevant to my interests in more ways than one. The story included this quote from Professor Mark Wooden:

Melbourne Institute professorial research fellow Mark Wooden said mandatory penalty rates inhibited employment by artificially keeping costs high. “I just came back from Europe and you don’t think of Europe as being a cheap place for eating out but it is cheaper than Australia,” he said.

I decided to try and figure out if he was right: are European restaurants cheaper than Australia? If so, do they just seem cheap because of our elevated exchange rate?

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Economists usually think that people’s revealed preferences (what they do) are more important than their stated preferences (what they say they’ll do). With that in mind, let’s consider George Calombaris’ claim that the minimum wages he has to pay his staff on Sundays make it uneconomical to open his restaurant(s). Is it true? Well, he claims that it is uneconomical to open on Sundays, yet he nevertheless opens on Sundays. Why would he do that if it were true that his costs exceeded his revenue?

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