Ut

I just noticed something that does not seem logical: white bread in Western countries costs more than whole wheat bread. Why?

You'd think that the reverse would hold. After all, it seems whole wheat bread is cheaper in developing countries. Refining flour into white flour costs money and should add to the price of white bread relative to whole wheat bread.

So why the discrepancy? (edit: I mean why does the discrepancy hold in Western countries? Why is white bread cheaper than whole wheat bread there?)

I have some hypothesis, but I do not know enough about the business of breads to sort out the true from the false. Does anybody have a clue?

Hypothesis:

1) Higher demand for white bread is driving down, through economies of scale, the cost of baking bread from white flour instead of whole wheat flour. These savings are lower than the additional cost of refining flour.

or

2) Oligopoly conditions in the bread market are keeping the price of whole wheat bread higher than its perfect competition pricing. (But then why is white bread not subject to the same process?)

or

3) Governmental subsidies or regulations in the food and agriculture industry are artificially keeping down the price of white flour.

What do you think?

Arken

I'm confused. It looks like you answered your question with the second paragraph. I don't see the discrepancy.

Also, it seems to me that white bread is generally cheaper. That is a discrepancy.

Ut

I'm specifically asking why the discrepancy holds in Western countries, not why it does not hold in developing countries.

Sorry for being unclear.

P.S. I'll fix the OP to make it clearer.

trunks2k

A big reason for the lower price of white bread is that it has a longer shelf life than whole wheat bread. In a country where the demand for bread is very high and there is little over production, that won't matter too much. But in the US we over produce the amount of bread we actually need so having something that stays fresh longer is more likely to sell eventually, while a bread with a shorter shelf life is less likely to be sold.

Vorkosigan

Another reason: perhaps it is purchased by wealthier families who are willing to pay more for the same product.

Kat_Somm_Faen

Simple,

everything is priced at what the market will bear.

The story about cost of producing and marketing and the rest are BS. You can quote me on that.

Market will bear higher cost of whole wheat bread but not white.

Correspondingly, even though it is harder to produce it is cheaper. Market awards demand and abundance of a commodity.

Simply, the people will not stand agains the prices and vote with their money.

Now you can ask questions about diamonds. Thousands of dollars for a clump of carbon. Has no utility value whatsoever. Most of the biggest ones only have value as museum showpieces. Other then that a meat clever has higher utility.. yet the market bears the prices. So it is truly in the eyes of the beholder.

Kinross

White bread is cheaper because white flour is cheaper. White flour is cheaper because significantly more people prefer white flour over non-white flour. The production of white flour gains the benefits of economies of scale to make it cheaper.

Kinross

Example:

Say the up front cost to produce white bread is $200 and the per unit cost is $0.11 and you can sell 10,000 units

Say the up front cost to produce non-white bread is $150 and the per unit cost is $0.10 but you can only sell 1000 units.

White total cost / unit = (200 + (0.11 * 10000)) / 10000 = $0.13

Non white total cost / unit = (150 + (0.10 * 1000)) / 1000 = $0.25

White bread costs $0.07 less per unit even though it has a higher up front cost and material cost per unit because it gains the economies of scale benefit.

Kat_Somm_Faen

Check the price of same import cars in developing countries and USA. For example, a Hyundai.

it is actually cheaper in developing countries that import the same car from Korea as is imporet in the USA. Now there might be some individual difference in taxes or import duties but the car itself is the same car made in Korea. It is exported in country A and USA...

I believe ( as I have seen it with my own eyes with a Hyundai ) that the same car will be up to a 1/3 cheaper than the US price.

Can someone from Canada give us a price of an import car as a Honda or Volkwagen? Say a 2003 Golf and a 2003 Civic?

I am 99% certain that it will be cheaper there yet it is the same car made for the same price in Japan or Germany ( same production cost ). For other coutries like Brazil or other poor countries it is way much different, IMO. It is just what the market will bear. Also how much a new M3 BMW cost in California compared to Alabama lets say?

I guess I should not force a conclusion but if we have people that can report their local prices from Canada, UK, Portugal and others just to see it in action.

...
Edit:

Just checked one of our local VW dealers - a median of 22 000 US$ for a 2003 GTI Golf.

Edit 2:

Just checked a local Honda dealer. Honda Civic Hybrid is around 20 500 US$. While an SI has an average of 19 300 US$ and an EX of just under 18 500 US$.

I suggest this as a practical experiment. So I would certainly not mind if people jump in with reports on prices. It would be interesting to see if there are any variations or not.

joedad

What Kinross said.

It's like unleaded gasoline. It was more expensive than regular leaded gasoline when it was first introduced. You'd think that without an additive it would be cheaper. Think again.