Column: Market matters

Financially fit

Before you turn away from this page, take note that I’m not going to be talking about the stock market. No, no, despite me being an economics major, I am far from being of the caliber to even begin to make the slightest commentary in regard to the stock market and its incessant movements and machinations.

With that said, if you thought this was going to be about the stock market, then you should turn away. I may save that for a different day.

Today, I will broach upon the somewhat tender subject of choosing the right supermarket for you and your needs. I’ll even throw in a bit of economic theory to whet the appetites of the scholarly types.

The city of Davis houses a wealth of supermarkets that isn’t typically seen in a city of such small proportions. To choose from, we’ve got the Davis Food Co-op, Grocery Outlet, Nugget, Safeway, Save Mart, Target, Trader Joe’s and the recently opened Whole Foods. Not to mention pop-ups like the Davis Farmers Market as well. And those are just the local options that are readily accessible on bike.

If you’re fancy and have got a car, your options broaden to the likes of Food 4 Less, Costco or Wal-Mart, amongst others.

There are a myriad of factors to take into account when deciding where to purchase the ingredients for your “2 a.m. chili,” including distance relative to oneself, quality, value, etc. For instance, some may choose to shop at the Food Co-op simply because they support and value what it stands for. Others may shop at Safeway because they live right across the street from it.

An analogous model that you may witness in an economics lecture is Hotelling’s model. Yeah, this model isn’t about hotels, but they can be used in it. This model was proposed by Harold Hotelling in the late 1920s and involves a street in the form of a straight line, one mile in length, with two shops.

Each shop has products of the same quality and price, and the consumers are spread equally along the street. Therefore, since the prices and quality are equal, the consumer can only base their choice on distance. Naturally, the shop closest to them will receive their business.

Though Hotelling’s Model greatly simplifies a lot of real-life factors, it’s probable that most would opt for the closest grocery market to shop at. I can’t go out and compare every single price of every single product between each of the local grocery stores — they don’t pay me enough for that (I don’t get paid at all) — but I can offer some astute observations from my multitude of grocery trips.

Safeway is cheaper for name brands like Captain Crunch or Reese’s Puffs. The Co-op does carry some of the bigger name brands like Oreos, but charges a “fat tax” (as put by my housemate) to deter people from purchasing it. Trader Joe’s pretty much stocks entirely its own in-house brand, which saves costs by cutting out the middleman. Just skip their preservative-free breads and cereals because they oftentimes taste stale and go bad in a matter of days.

I currently live betwixt the Co-op and Wholefoods. I’m presented with a bit of a tricky conundrum as to what I should say next because my editor adores the Co-op and my girlfriend loves Whole Foods. Regardless of their opinions, I choose to shop at the Co-op more, since my housemate is a member and will therefore make more trips there. Thus, I won’t have to precariously struggle against gravity to keep my eggs intact while I ride my shitty mountain bike back to my apartment.

From an economics standpoint, I’m behaving rationally.

The concept of utility is something that comes up a lot when I’m deciding where I should go. It can be defined as the preference of some goods over others. Think of it as “measured happiness,” as a past economics lecturer put it. So to me, somewhere like Store A may give me a flat utility of 25, whereas Store B would only give 22. Thus, even if Store A were slightly further from me, I would still go there simply because I enjoy their products more.

You don’t need to have knowledge of economics to behave in this manner though. It’s just a natural, rational way to behave.

Then again, people don’t always behave rationally…

ANDREW POH wants to know where you shop at! Let him know at apoh@ucdavis.edu.

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