Aug

16

Masa restaurant

I had the best steak in my life last night in Sandpoint , Idaho. A filet of Wagyu beef, bred locally. - Dan Grossman.

The main surprise in Dan's post now that we know that it was suitably down to earth was that a local product like that should be of such a high quality near to the source. Invariably the best quality is at distant locations like Masa from Japan where the transportation costs make the necessary marginal utility of purchasing the product much higher. One leaves as exercise for reader how this can be applied to meals for lifetime in markets.

Henrik Andersson comments:

Maybe the way some successful investors that are far from the information centers (like Wall Street) are widely regarded legendary analysts (at least outside this site)– like Templeton in the Bahamas, Buffett in Omaha… 

Yishen Kuik writes:

a nile perchMany tropical fruits produced in Malaysia get sorted by quality grade, the best of which are sent abroad because they can fetch a higher price in higher GDP/capita countries. Locals complain that they only get the imperfect fruit. Probably useful to note that when you buy and eat a beautiful fruit from Whole Foods, it's possible that is because 4 or 5 other people elsewhere are eating fruit from the less beautiful left tail of the distribution.

An extreme example of this was featured in the documentary Darwin's Nightmare, where Nile perch from Lake Victoria were caught by local fishermen, turned into Western supermarket friendly fillets and airflown by Soviet pilots to Western Europe. The remnants of the fish carcass are fried and sold locally.

However, I would assume the best sashimi is likely to be sold locally in Japan. The whole mysticism of a Platonic ideal for fish is taken very seriously over there and the population is wealthy enough to bid to keep the best specimens at home.

The best product goes where it will fetch the highest price it seems.

Victor Niederhoffer emails Tyler Cowen:

What is the economic analysis of this? The thread started with a friend saying he had some great wagyuo beef in Idaho and I said I was surprised that a local high quality product like that was not shipped far away because of transportation costs and diminishing marginal utility et al.  

Tyle Cowen replies:

I don't think the Alchian-Allen theorem holds so often for perishable foodstuffs. First there is the spoilage problem.

Second, consumer taste is often more sophisticated near the product's source (maybe people ate it more growing up because of higher absolute quantity). Japanese have better taste in sushi than we do, for instance. That means Japan ends up with the higher quality sushi.

Alston Mabry comments:

But Japan is also by most accounts the most expensive country in the world to live in. If sushi were native to Angola, then Angolans would eat lousy sushi and export the good stuff. Japan, being rich, keeps the good stuff. The good stuff tends to flow from places where prices are low, to places where prices are high. 

Jason Thompson adds:

Concerning what you wrote about how "Japan is also by most accounts the most expensive country in the world to live in."…

Indeed it's close and this fact is critical to recall when one hears the canard about Japanese "deflation" and their lost decades. It's amusing when stooges like Jonathan Laing (Sp?) of Barrons uses Japan to advocate further dollar debasement and expanding the Fed's role to buying SP futures. It goes to show how the fascist kleptocrats have won when such nonsense can be discussed as if based on sound foundation of fact and logic. Japan is a mess because of a

1) a bubble fueled by massive credit creation made possible by funny money

2) the unwillingness to accept the consequences of said bubble popping (As this would mean that many ofthe elites that run the show would go broke/lose power/lose face)

3) terrible demographics combined with terrible social entitlement programs whose math only computes w/rising taxpayer base.

Don't misunderstand me, parrallels exist between Japan and the US, it's just that the kleptocrats don't want you to figure that the connection is their behaviour– that they are the problem. 


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