Restaurants are more expensive? You mean like inflation?
Yes, inflation! And no needed hedonic adjustment, similar but the opposite of phones, TVs, cars, etc. Prices at restaurants are going up while quality is going down.
But it is also an example of transitory inflation caused by one-time factors. The industry had a double supply shock.
First, the “900 a week in unemployment to people who were making $500 a week working” federal policy hit the labor supply of restaurants really hard.
Second, COVID caused a lot of restaurants that were marginal to shutdown permanently. While some might reopen, others had owners just retire, while others changed industries. Reopening during a severe labor shortage and shifting COVID regulations is a lot harder than just having an existing business on autopilot.
