That’s the title of a new paper I have forthcoming in the Journal of Economic Behavior and Organization.
In short, I find the more one spends on food, the less consistent are their choices. In the economic way of thinking, inconsistency is typically associated with irrationality. First saying I prefer A to B, but then later saying B is preferred to A is an inconsistency, which is often referred to as a preference reversal. It’s hard to square such preference reversals with any model of rational choice.
Why might preference reversals increase with a consumer’s income? Here’s a bit from the paper (omitting references):
In an empirical application involving almost 540,000 food choices made by almost 60,000 people, I find that 47% of respondents committed at least one preference reversal. How do preference inconsistencies relate to income and food spending?
Why does it matter whether rationality falls as incomes and food spending rises? As I’ve argued previously, increasing affluence likely allows us to indulge “higher” needs related to self actualization and self expression. Here’s a last bit from the paper, which is more speculative, and hopefully will spur some additional research (again, omitting references for readability).