Stop nudging and start pushing

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?