Calorie labeling is a good thing; dieters should know more about the foods they are eating. But studies of New York City’s attempt at calorie posting have found that it has had little impact on dieters’ choices.
Obesity isn’t a result of a lack of information; instead, economists argue that rising levels of obesity can be traced to falling food prices, especially for unhealthy processed foods.
To combat the epidemic effectively, then, we need to change the relative price of healthful and unhealthful food — for example, we need to stop subsidizing corn, thereby raising the price of high fructose corn syrup used in sodas, and we also need to consider taxes on unhealthful foods. But because we lack the political will to change the price of junk food, we focus on consumer behavior.
That is George Loewenstein and Peter Ubel, behavioral economists both, on the overuse of behavioral economics.
Naturally they are right: if we really want to change a behavior, we have to change incentives (like prices) or impose restrictions. We don’t nudge people away from domestic violence, for instance, we criminalize it. We don’t just encourage people to stop smoking, we tax the socks off cigarettes.
The obvious rejoinder is that not everyone is comfortable with regulating and taxing and messing with prices. Nudging’s appeal is that it preserves free choice and minimizes state manipulation.
The other defense of behavioral economics: ‘getting the prices right’ and regulation can create more problems than they solve. If your meddling creates a black market, you create a space for crime and disorder. It took more than half a century to fight back the organized crime that Prohibition fostered.
In the wake of my field visit, I’m struggling to decide whether the street youth in Liberia respond better to nudges or pushes. On reflection, our ‘behavior transformation program’—essentially cognitive behavioral therapy for anger management, impulse control, and future focus—is a shove rather than a nudge. We’re aiming to shift not prices, but preferences.
Might there be realms of behavior in the ultra poor where nudges outperform shoves?
7 Responses
The problem with pushes is that they’re inherently paternalistic. Who are we to determine how preferences should be shifted? Having said that, I think the reality is preferences are much more dynamic than we seem to assume.
Also — that NYT article was wrong and misleading. An information campaign is not a behavioral economics intervention — it simply addresses an information asymmetry. Altering the form in which the information is presented would be.
What DRDR Said. All of the studies to date–and I know a couple of people who did them–have concentrated on the choices made once one is inside the establishment.
If BK’s “2 for $4” ;promotion didn’t note that they’re selling 1260 or so KCals, I might well have spent the money–and then wondered why several miles of bicycling a day (having given up the car for short trips) wasn’t helping me keep weight down.
Also, seeing “1260” doesn’t in itself tell you anything; even on the menu, it’s a comparison only between offerings of the establishment you have already entered. (Note that many food labels now also have “% of Average Daily Recommendation”; we can quibble that “2,000 KCals/day” is ridiculously high, but at least it’s a consistent measure.)
The one thing Calorie listing can do is the one thing we can’t measure: keep people out of a place, or help them make different choices. Speaking strictly for me, the “must show calories” law has helped–in a way for which no study to date has accounted.
Don’t under-estimate the formidable power of the sugar lobby who would fight any kind of duty on high-sugar foostuffs tooth and nail.
What’s striking about the example of corn subsidies is not that changing relative prices might create black markets, but rather that we’re currently pushing the wrong way. The push recommended here wouldn’t distort the price of high fructose corn syrup, it would “un-distort” it. Surely this push–more akin to “letting go” I guess–would be more effective than the nudge of calorie labeling. (Although I must say that I much appreciate knowing how my calories are in a Starbucks pastry.)
Around 1900, i.e., for several decades before and after, many individuals in Western Europe and North America started savings banks. The movement was based on proselytizing, neither nudges or shoves. One could restart that in Africa, combined with nudges and pulls. One pull that I like (I and a co-author have written on it), is lottery-linked deposit accounts. These are savings account on which the bank pays a stochastic rate of interest. Each month most account holders get no interest, but some get thousands of dollars, or even tens of thousands, depending on the structure of the lottery component. This mechanism encourages savings by linking saving to the possibility of striking it rich (“selling hope”).
i’m not ready to declare calorie labeling a failure yet. People aren’t going to change their habits instantly no matter what the incentives and information sets are.
What about the middle ground between nudge and push?
Consider the approach to drunk driving. Some of it is nudges (helping people overcome their biased judgment about their intake and capacity to drive, for instance). Some of it is what you describe as ‘pushes’ (severe punishments).
But a great deal of the social change happened somewhere in between the psychology of judgment and the rationality of incentive structures. The anti-drunk driving campaign helped to create new social institutions (the ‘designated driver’), help model strong ‘scripts’ for behaviour (for instance, calling cabs on others’ behalf, taking away keys, etc.), and establish new forms of social stigma (drunk drivers as a stigmatized and highly undesirable social category).
The nudge/push dichotomy here seems to neglect social context – it is social psychology minus the ‘social’.