6
USING BEHAVIORAL ECONOMICS TO
toward understanding how the various aspects of the environment contribute to the development of obesity and its comorbidities. This environment is made up of a variety of structural elements (e.g., public transportation;
supermarket density), financial constraints (e.g., food prices), cultural norms (e.g., screen time; advertising), policies (e.g., taxes; wellness programs), and other factors that shape both physical activity and dietary behaviors. Indeed, studies show that consumer exercise habits and food choices are affected by the built environment (e.g., presence of sidewalks, safety of neighborhoods) (Booth et al., 2005; Sallis et al., 2012; Mayne et al., 2015), availability of foods (e.g., proximity of supermarkets and fast-food restaurants) (Hoyt et al., 2014; Kruger et al., 2014), food and beverage advertisements (Parker et al., 2009), and a number of other factors that affect health choices (e.g., pricing and packaging of products) (Darmon et al., 2002). Within this environment, consumers make dozens of decisions every day regarding their food and beverage intake and physical activity (see Chapter 5 on Physical Activity), and those decisions shape long-lasting habits that affect health. Those decisions are determined, in part, by consumers’ perceptions of the environment, biases and heuristics, and the way the environment is structured to encourage or deter certain health behaviors.
The food and beverage industry is a major player in shaping consumer perceptions, preferences, and behaviors. Food and beverage companies play a central role in determining how their products are priced, promoted through advertisements, and which types of products will be available for consumption. Portion sizes for sugar-sweetened beverages (SSBs), default side dish options served with meals at restaurants, and the placement of energy-dense, nutrient-poor products in supermarkets are just a few examples of how food and beverage companies shape the food environment. The current food environment heavily promotes highly processed foods, sugary beverages, and large portion sizes at relatively inexpensive prices, making it challenging for many consumers to maintain healthy dietary intake. Indeed, comparisons between portion weights and standard portions established by USDA and FDA show that cookies exceed USDA standards at 700 percent while cooked pasta, muffins, steaks, and bagels also exceed USDA standards at 480 percent, 333 percent, 224 percent, and 195 percent, respectively (Young and Nestle, 2002).
A variety of population-level, environmentally focused interventions have attempted to address obesity, but many of these efforts have been met with
strong resistance from the food industry, policymakers, and consumers.
Sugar-sweetened beverage taxes were proposed in a number of localities in the United States during the past couple of decades, but just one city (Berkeley, California) successfully passed a law (Mandaro, 2014). In Mexico, the SSB tax was associated with reductions in the purchases of taxed beverages and increases in the purchases of untaxed beverages (Colchero et al., 2016). In New York City, the proposed ban on transfat was linked to increased food costs and a decrease in food options by the food industry (Brownell and Pomeranz, 2014). Changes to school nutrition programs have improved the nutritional quality of meals served in educational institutions, despite persistent criticism and skepticism about the changes (French and Story, 2013; Woo Baidal and Taveras, 2014). Even menu labeling, which involves posting calorie information on chain restaurant menus, was met with strong opposition from the food industry (Tavernise, 2015). This policy, as multiple studies showed, was quite limited in its impact on food choice (Cantor et al., 2015; Bollinger et al., 2011). A key question is how an alternative approach to labeling might alter its effectiveness. Despite these promising approaches to obesity prevention, the difficulties in implementing these types of interventions suggest the need for supplementary approaches that appeal to consumers, the industry, and public health advocates.
Using economic approaches to address obesity
Some economic approaches hold promise as potential interventions for improving dietary choices. Traditional economic principles have been used to explain human behavior, but these approaches are limited by assumptions that people are rational, act according to their long-term self-interest, and that limited self-control does not impact the ability to behave as intended. Indeed, the traditional economic literature assumes that people make poor food choices because they lack perfect information that would help them act according to their best interest (Stigler, 1961). However, even in the presence of appropriate information, consumers are still affected by their biases, heuristics, and the way foods and beverages are presented.
Behavioral economics helps address some of the gaps of traditional economics by explaining the variety of nuances that influence decision- making; these nuances are especially relevant to food intake because of the
competing factors involved in dietary choices (e.g., taste, convenience, price, health). Behavioral economics research demonstrates that consumers regularly shift from rational to impulsive decision-making based on the context of the consumer environment (Kahneman, 2003). These shifts in behavior can make healthy dietary behaviors difficult to maintain. Thaler and Sunstein (2009) propose one potential tool for changing behavior through
“nudges,” defined as “any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives” while simultaneously being easy and cheap to avoid (p. 6). However, because nudges, by definition, are cheap and easy to avoid, one political limitation of behavioral economics involves the risk that “soft nudges” will be enacted instead of policies that restrict or eliminate a behavior and are unavoidable by consumers (e.g., SSB taxes, beverage portion cap policies, food advertising bans). Such changes to the food environment (the major focus of food policy advocates and policymakers) are perceived as more paternalistic than government regulation of the food environment. As such, these types of changes are more palatable to food and beverage companies and consumers who highly value personal responsibility and freedom of choice. However, behavioral economics approaches also need to be rigorously examined prior to implementation in order to increase the likelihood of effectiveness.
This chapter reviews behavioral economics concepts that can provide a useful framework for increasing healthy dietary decisions and shifting the food environment toward healthy defaults. Consumer judgments, valuations, and habits are shaped by factors such as biases and heuristics, default options, and preferences. Considering these factors will be critical for shifting the food environment away from heavily promoting energy-dense, nutrient-poor options and instead focus on purposeful presentation and promotion of products that are likely to encourage healthful dietary habits. Research shows that maintaining a healthy diet and consuming healthier foods can positively influence weight loss. For example, substitution of unhealthy refined-grain carbohydrates for healthier whole-grain carbohydrates can aid in reducing blood glucose levels and cardiovascular risk (Willett and Skerrett, 2001; Hu and Willett, 2002). Further, results from a meta-analysis show that obese adults lose more weight per week when eating a healthy diet or by coupling a healthy diet with exercise in comparison to just exercise alone (Miller et al., 1997). By highlighting the impact of dietary decisions on health, behavioral
economics approaches to obesity prevention can strengthen existing policies and contribute to the development of new policies that preserve consumer choice while facilitating healthy behaviors.
Overview of the literature
Behavioral economics principles relevant to the study of eating behaviors
Traditional economic approaches generally consider that choices are shaped by preferences and budget constraints. In such a model, consumers make choices, including food choices, which are in their long-term best interest.
They maximize their utility when faced with a budget constraint and a choice set of goods. Behavioral economics is an interdisciplinary study of psychology and economics that is rooted in the ideas that (1) most judgments and most choices are made intuitively and (2) that the rules that govern intuition are generally similar to the rules of perception (Kahneman, 2003). In terms of food behaviors, behavioral economics may also provide an additional explanation for obesity by evaluating risk from eating behaviors and time tradeoffs through individual preferences (Leonard, 2013).
Psychologists typically use System I and II thought processing to explain everyday behaviors. System I is automatic, effortless, and emotionally charged. System II is controlled, effortful, and neutral (Kahneman, 2003).
One food environment, a supermarket for example, can affect food behaviors differently depending on the thought process used. Shopping while hungry may trigger System I thought processes and lead consumers to purchase more processed food items in order to curb hunger more quickly. A customer who is not influenced by hunger while grocery shopping is more likely to use System II thought processing, consider the lack of health benefits associated with consuming processed foods, and purchase healthier items such as fruits and vegetables. System II typically regulates System I through slower, logical thinking during information processing. However, depletion of cognitive resources by hunger, thirst, or stress allows System I’s automatic, emotionally charged processing to prevail in decision-making (Kahneman,
2003). Through assessment of psychological and physical states (e.g., hunger) and consumer behavior, behavioral economics may be successful in explaining how thought processing can also influence eating behaviors.
A number of behavioral economics principles build upon the assumptions regarding Systems I and II, thus providing a variety of tools to consider when planning dietary behavior interventions. Mass defaults apply to all customers and services, without taking customers’ individual preferences into account (Goldstein et al., 2008). For example, standard shipping is assigned by default regardless of when a customer needs an item (Goldstein et al., 2008).
From a marketing perspective, food and beverage companies utilize larger product sizes in advertisements to draw more attention from all consumers, which has proven effective through an increase in profit. Restaurants use large dinner plates, bakers sell larger muffin tins, pizzerias use larger pans, and fast-food companies use larger drink and French fry containers (Young and Nestle, 2002).
Personalized defaults reflect individual differences and are better tailored to meet every customer’s needs (Goldstein et al., 2008). For example, airlines automatically assign an aisle seat on a plane to individuals who have previously bought an aisle seat (Goldstein et al., 2008). Personalized defaults were also utilized in the “Share A Coke” campaign, where a wide variety of first names were printed on Coca-Cola cans and bottles. The ability to have one’s name incorporated into the bottle and can design makes the product much more desirable to consume and to keep as a collector’s item (Weiss, 2015).
Instant rewards can interfere with long-term decision-making. In terms of food behavior, the idea of eating or buying food now or later is best described by immediate gratification, present-biased preferences or hyperbolic discounting in behavioral economics terms (Frederick et al., 2002). When making food choices, we tend to pursue rewards that we do not appreciate in the long term (O’Donoghue and Rabin, 2000). For example, consider a meal from McDonald’s consisting of a Big Mac, fries, and a large soda purchased during a lunch break from work. At the time, the food may taste good and satisfy hunger. However, after finishing the entire meal, consumers may feel sluggish and tired. Purchasing energy dense foods as opposed to preparing a healthy meal in advance might demonstrate present biased preferences if in making this choice the consumer did not fully consider longer-term self- interest. Although delayed in comparison to accessible energy dense foods,
benefits of preparing a healthy lunch would include saving money and maintaining higher energy levels (e.g., productivity in the workplace).
Visceral factors are negative emotions, drive states, and feeling states that grab people’s attention and motivate them to engage in specific behaviors (Loewenstein, 1996). The defining features of visceral factors include (1) direct hedonic impact, defined as the conscious and unconscious sensations that result from an experience (usually negative), and (2) an effect on the relative desirability of different goods and actions (Loewenstein, 1996).
Imbalances between perceived self-interest and behavior result from visceral factors and can cause people to willingly behave in ways incongruent with their long-term goals and interests (Loewenstein, 1996). For example, someone who is thirsty will be motivated to quench this aversive feeling as quickly as possible. Visceral factors are often influenced by sensory cues such as sight, sound, or smell to trigger a craving. For example, the feeling of hunger makes food more desirable and predicts impulsive food behavior and decision-making based on convenience (Loewenstein, 1996).
Status quo framing occurs when a choice that is typically an alternative is placed in the status quo position while other choices become alternative options (Samuelson and Zackhauser, 1988). The “status quo” choice becomes a more frequent choice than it would have been had it simply been one of the alternatives. Related to this is the “default option,” which is the option provided if the consumer does not choose otherwise. Defaults can often become the status quo. At a fast-food restaurant, customers tend to stick to the default options such as fries or chips despite the availability of healthy options such as a salad or fruit (Kahneman, 2003). In addition, customers tend to drink sugary sodas even when other beverages such as water are available and can be self-dispensed. In addition to being unhealthy, these default options often come in large portion sizes. Outside of the fast-food arena, large portion sizes are also problematic in restaurants, supermarkets, and at home (Wansink et al., 2006).
Interventions in the field of behavioral economics should supplement findings from previous economic research. Since traditional economic research focuses primarily on prices, and supply and demand, and taxes on eating decisions, behavioral economics may provide further insight on the psychological, cognitive, and emotional influences on eating behaviors.
Although not an alternative to the existing interventions, behavioral economics may provide valuable information for effective policy change to
reduce the availability and promotion of foods high in sugar and fat.