LA might actually be cheaper than you think

Everyone thinks Los Angeles is expensive. The rent is brutal. Home prices routinely top $1 million. Tourists expect to spend more the second they land at LAX.

But according to economists, one of the biggest assumptions people make about LA is not entirely true.

Some everyday items are actually cheaper here than in other parts of the country.

That includes tacos.

When asked how much they thought a taco cost in Los Angeles, people interviewed at Hollywood & Highland guessed anywhere from $10 to $15.

The reality was much lower.

At Leo’s Taco Truck, a carne asada taco cost just $2.55.

“In a competitive, cutthroat environment, price is going to get driven down,” said Matthew Kahn, Provost Professor of Economics and Spatial Sciences at USC.

Kahn said Los Angeles benefits from something many smaller cities do not: endless competition and variety.

“Around USC, we’ve got these food trucks serving a variety of food,” Kahn said. “The price can be low because the food trucks don’t have high rent.”

Produce is another major example.

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California grows nearly 60% of the fruits and vegetables Americans eat, according to James Sayre, Assistant Professor of Cooperative Extension, Agricultural and Resource Economics at UC Davis.

“It’s a lot cheaper to bring that produce to consumers in LA than it is to consumers in the Northeast,” Sayre said.

That difference matters because grocery stores operate on thin margins.

“Food retailers don’t have these large profit margins to absorb shipping costs,” Sayre said. “They get passed along to consumers.”

Farmers markets can sometimes lower prices even more because shoppers buy directly from growers and avoid supermarket markups.

For more on this topic, check out the latest episode of our series “Everything They Say About LA Is A Lie” in the link above.