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.