What’s Behind the Food Truck Phenomenon? Information Frictions and Taste-for-Variety∗

We study the economic causes and consequences of the recent explosion in gourmet food trucks. We argue that 1) new mobile communication technology enabled food truck growth by relaxing an information friction complicating their business model and 2) that an important advantage of food trucks over brick-and-mortar restaurants is that trucks can use mobility to capitalize on consumers’ taste-for-variety. We use novel data from the internet, including food trucks’ real-time Twitter feeds, to support our theory. We also provide evidence suggesting that the growth in food trucks has increased social surplus for urban consumers by increasing access to food variety. ∗We would like to thank Matthew Kahn, Stuart Gabriel, Connan Snider, Walker Hanlon, Steven Laufer, Leah Brooks, and other seminar participants at UCLA, the FRB, USC, Duke, George Washington and Cal Poly for helpful comments and suggestions. Jessica Hayes, Gage Love, Brett McCully, and Waldo Ojeda provided excellent research assistance. All errors are our own. The analysis and conclusions set forth are those of the authors and do not indicate concurrence by other members of the research staff or the Board of Governors. †elliot.anenberg@frb.gov. Board of Governors of the Federal Reserve System, Washington DC. ‡ekung@econ.ucla.edu. UCLA, Los Angeles, CA.