Can Behavioral Economics Make us Healthier?
Think about your ideal burger. A juicy, perfectly browned meat patty, with crispy lettuce and slice of bright red tomato, all enclosed in a freshly baked burger bun sprinkled, ever so delicately, with sesame seeds. Doesn’t that sound enticing?
Now imagine that your favorite burger joint started to proudly advertise this . . .
. . . the “Moldy Whopper.”
In February of this year, Burger King launched this advertisement, to promote their upcoming by-line “the beauty of no artificial preservatives”. While many praised the company and its creativity in marketing, behavioral economists took an opposing stance.
Behavioral economists are not quite the same breed as their colleagues doing more traditional lines of work. Traditional economics is founded on the fundamental premise that consumers, or all economic agents for that matter, are ultra-rational beings who make decisions with only one goal: maximizing utility. Behavioral economists, on the other hand, acknowledge that consumers often make less-than-optimal decisions on the basis of convenience and emotions.
As outlined in Daniel Kahnman’s book, Thinking, Fast and Slow, our brain uses a dual-processing method when responding to external stimuli. System 1 thinking is based on emotional and immediate reactions, whereas System 2 is largely based on logical response mechanisms that require time and effort to process the stimulus that our mind is faced with. An overwhelming 95% of our decisions are made instinctively using System 1 processing, since our brains tend to relapse into cognitive easing. This is where we fall back on heuristics, or mental shortcuts, that involve limited mental effort to come up with a decision. In summary, the traditional theory of economics rests upon cost-benefit analysis emblematic of System 2 thinking, while behavioral economics captures humans’ inclination towards System 1 thinking and the use of emotions in decision making. This is why the Burger King advertisement has been perceived as such a monstrosity in the realm of behavioral economics.
What would be your first reaction when seeing this rotting burger on TV? For most people, it’s likely something to the effect of an internal “Eww!” and away their heads turn. Our brains do not give the image a second, more thoughtful interpretation to take into account the implied message behind the advertisement. Therefore, we do not even reach the stage of cost-benefit analysis before making the decision to disregard the burger immediately.
This case study opens up a much larger discussion about how we can use the understanding of behavioral economics in food advertising to promote certain food habits. Take the Lays slogan “betcha can’t eat just one.” For many people, this simple slogan is enough to drive the rational, self-control out of their own hands and into the hands of the chips company. In that moment, our desire to eat the next chip outweighs all our logical reasoning regarding our health. But the next question that arises is, if the principles of behavioral economics can be used to stir us towards unhealthy consumption choices, why is this not enough to push us towards the better and healthier food options?
For a while now, it has become mandatory for restaurants in the US to display calorie information regarding the food served, as part of the recent healthcare reforms. The concept behind this was to invoke System 1 thinking and disincentivize the consumption of high calorie foods to combat the growing problem of obesity in the US. However, most studies tracking this reform noted that this initiative has had little or no effect. In fact, the only place where this appeared to be successful was Starbucks, whose clientele do not represent the population with high rates of obesity that were targeted by this reform. More importantly, even if this legislation was seen to be effective in restaurants, this would not be enough to combat the much bigger problem of meals at home and home-snacking..
It seems that while behavioral economics may be able to induce behavior changes in the short run, as these changes are only based on our immediate response, it lacks the ability to induce long term changes as consumers don’t consider the rational and logical implications. In order to drive consumption towards healthier decisions we may need a combination of both traditional economic incentives, such as taxes or other monetary disincentives, with the more immediate, behavioral economic incentives. Imagine if Burger King had advertised the most appetizing “healthy” burger, with vegetable substitutes, appealing to both our system 1 and system 2 reasoning. Now that’s an advertisement all economists could get on board with!
Written by Aditi Rudra, Undergraduate Economics Student
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George, Lowenstein. “Can Behavioural Economics Make Us Healthier?” BMJ, vol. 344, 30 June 2012.
Kahneman, Daniel. Thinking, Fast and Slow. Nota, 2013.
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