Popular Restaurants Aren’t Always Good Restaurants

So sayeth Tyler Cowen, and there is a rationale behind his declaration:

Here is the logic. Let’s say a restaurant allows a line to form outside the door. Why don’t they just raise their prices? Well, for one thing the line, and the accompanying difficulty of getting a reservation, is a way of marketing the restaurant to potential customers. Which means the place needs marketing in some manner, which means its audience is in some way not so well-informed about where they ought to be eating. They tend to be trendy people who follow…lines. Conformists, in other words.

A lot of places with lines are quite good but when they fall they fall hard. In the meantime, the presence of a line indicates the place extracts consumer surplus in some fairly inefficient ways, so why should you go, especially if you are not a conformist? I recall the wise words of my undergraduate differential equations teacher, Professor Lim, who once averred “I don’t want in line.”

What about a totally empty, deserted restaurant? Well, it depends on ethnicity. If it’s an Ethiopian place, it means everyone is coming much later. Go anyway, and enjoy the personal attention you get.

What about an Afghani or Pakistani place or for that matter a Haitian place? They may make their livings doing catering or weddings. In those cases, emptiness is often a sign of quality. It means they make their food for truly demanding customers who demand the best for ceremonial purposes. It means they have not learned how to sell out or dumb down their food, and they just don’t have enough compatriots in the neighborhood to put many people in the seats on a regular basis (for these reasons, emptiness is not a good sign in say the Eden Center, where the number of Vietnamese diners is quite high, or say in Mexican restaurants on Kedzie street in Chicago, and so on). Very often empty restaurants come from cultures where consumption is intensely seasonally cyclical, and that is positively correlated with food quality.

Purveyors of empty restaurants are also Adam Smith’s classic overconfident, delusional entrepreneurs. That’s who I want cooking for me, as most great food is not in fact that profitable.