Tuesday, October 6, 2009

Rice

OK Freakonomicists,

Why is brown rice more expensive than white rice? As far as I know, white rice is just brown rice with the hull milled off. Therefore, the act of processing makes it cheaper. This would be like gasoline being cheaper than crude oil. The "scale of demand drives down price" argument doesn't work because they are the same thing at different levels of refinement. Shouldn't demand for either type of rice affect the total demand (and price) for rice? The only reason I can think of is that you can sell lower-quality rice as white rice because you mill off the part that wold be visibly imperfect. Either that or rice producers have figured out what the economist loves to make me feel bad about--that consumers of eco-preferable products (hi!) are price-inelastic morons.

any thoughts?

3 comments:

Laura said...

Only one, which is that brown rice spoils more quickly than white rice. Michael Pollan informed me that when you remove the "brown" stuff from rice and wheat you're removing the stuff that is delicious and nourishing to molds and such (and the Indianmeal moths currently infesting my cabinet). So maybe there's some associated shipping/containing costs.

8yearoldsdude said...

I think you actually nailed it, Lau. Resident economist AP informs me that the shelf life of white rice is longer. This means that white rice price does not have to include such a high % of the product going unsold due to spoilage.

Wade Garrett said...

What I don't understand is how white rice gets so white. Removing the husk doesn't answer it for me, because its not as if brown rice is white inside, once you bite through the brown hull. Brown rice is brown all the way through. I don't get it.