Pushback against Nudges

A couple items recently came across my desk that were somewhat critical (at least in parts) of the use of behavioral economics in public policy making - in particular the idea that government can use insights from behavioral economists to nudge us into making the "right" decisions.

The first item is this new paper by Viscusi and Gayer for the Brookings Institute.  They reasonably ask why behavioral economists haven't spent nearly as much time studying the irrationality of bureaucrats, politicians, and policy makers as they have studying the irrationality of consumers.  Here's an extended quote (footnotes omitted) from their discussion on the propensity of government officials to suffer from a phenomenon called ambiguity aversion:

“Ambiguity aversion is a form of irrational behavior and should not be confused with risk aversion in which people are averse to the risk of incurring a large loss . . .

Government policies frequently reflect this ambiguity aversion with novel risks. For example, court rulings tend to demonstrate a bias against innovation and the attendant uncertainties
of novel drug products. In situations where there are adverse health effects from new drugs, the courts are more likely to levy sanctions against the producer. This bias on behalf of the public is also reflected in product liability case experiments using a sample of judges participating in a legal education program. The judges considered hypothetical cases involving novel drugs and their associated liability risks. When given a choice between a new drug posing an uncertain risk or another drug with a higher known risk, most of the judges recommend that the company market the latter drug.

Another instance of ambiguity aversion involves genetically modified organisms (GMOs) . . . GMOs have come under fire and are increasingly subject to potential regulation throughout the world. . . Critics have characterized GMO foods as being very risky products of biotechnology, labeling them “Frankenfoods.” The policy trade-off involved is that GMOs may pose uncertain risks that currently are believed to be low in magnitude, but they reduce the cost of producing agricultural products, which in turn lowers food prices and promotes better nutrition. ”

They go on to hint at the idea (though never come right out and say it) that the precautionary principle is a behavioral bias.  

The other item was an article in the The Guardian that asks whether all the cutesy messages by companies and governments encouraging us to "do the right thing" are really all that helpful or more effective than traditional policies.  The conclusion: 

“And another lesson, not mentioned by the team, but by other economists , is that it is very important to question whether the choices of the behaviourists, whether in government or in ad agencies where nudging opens up a yet more glorious prospect, are invariably wise and good. What, for instance, made the Highways Agency think that a made-up kiddie quote indebted to the Pret school of copywriting condescension (“a little girl asked us why we didn’t make gingerbread men”) might be preferable to speed cameras that build up points for offending drivers, as opposed to irritation in the law-abiding? Or preferable, indeed, to nothing? Maybe a little girl was involved.”

Food Demand Survey (FooDS) - July 2015

The July 2015 edition of the Food Demand Survey (FooDS) is now out.  

Overall, there seemed to be a slight reduction in demand for most meat products this month compared to June as indicated by a reduction in WTP, a reduction in expectation of price increases, and a reduction in planned purchases.  Some of this might have to do with the fact that there was an uptick in planned expenditures away from home, perhaps due to vacations.

Awareness of and concern for bird flu fell this month compared to last.  In July, there was an increase in awareness and concern among those issues that tend to fall at the bottom of the scale of concern.

Several ad-hoc questions were added this month.  

Overall, respondents were generally satisfied with their lives.  They were asked:  “All things considered, how satisfied are you with your life as a whole these days? Using the scale below, where 1 means you are “completely dissatisfied’ and 10 means you are “completely satisfied”, where would you put your satisfaction with your life as a whole?”

Similar to last month, the most popular response was an 8. 

Despite that, there seemed to be some pessimism with regard to the future in general and food and agriculture in specific.  

We asked,  “If you could be born at any time when would it be?” Participants stating they would choose to be born “in the past, 50 years ago” ranked the highest of the groups
at 31.21%. This may correspond to the category which most closely matched the lag in time from which participants were actually born (i.e., they preferred to be born when they were actually born).  Only 18.1% of participants stated they would choose to be born now.  Less than 20% said they would want to be born in the future.

Participants were also asked: “Overall, when you think about the state of food and agriculture in this country, do you think . . .” About 32% of respondents stated that “things are getting a little worse” for food and agriculture in this country, while only 19% of respondents agreed that “things are getting a little better”. About 27% of respondents stated that “things are about the same as they have been”.

Finally, Brandon McFadden from the University of Florida suggested a question that is a riff off a popular internet infographic showing the number of genes affected by different plant breeding techniques.  

Participants were asked: “For each of the following plant breeding techniques, how many genes are typically altered in the process?” Consistent with the comments in my recent Washington Post interview, the vast majority most consumers do not know how many genes are affected by any plant breeding techniques. Among those who stated an opinion,” selection” ranked the highest, at 7.65%, for not having any genes altered. For selection, having 1 to 4 genes altered ranked highest amongst participants at 11.8%. Hybridization was ranked highest by 11.8% of participants for having 5 to 9 genes altered. About 9% of participants stated that 10 to 19 genes were altered using genetic modification. Genetic modification was the highest of the group of 20 more genes affected at 7.14%. 

Why are people fearful of GMOs?

I answered that question and others like it for Roberto Ferdman in a piece at the Washington Post.

Here's one excerpt

“Ok, let’s talk about the future now. Would you say that we have hit the peak of GMO aversion?

You know, I actually have no idea. These things are really hard to predict. Much harder than most people realize.

Let’s suppose you had some really large food safety scare, which touched GMO crops even tangentially. That would sway opinions incredibly quickly. Now that doesn’t seem like it’s going to happen, and I certainly don’t think it will, but it’s not out of the question.

The other way it could go, however, is that someone introduces a biotech crop that captures the public’s imagination but doesn’t scare them. That way, people warm up to a GMO crop that is more approachable, and in doing so, become desensitized to the bizarreness or strangeness about GMO crops that they once felt.

A perfect example is this new arctic apple, which doesn’t brown. Especially if it isn’t made by some big agricultural behemoth, like Monsanto.

But people might also just realize that most of the cheese they eat is made with enzymes that are genetically engineered. Diabetics, after all, use insulin that is made from a genetically engineered bacteria or yeast.”

Jurassic World

On Father's day, we had a family outing to see the new movie Jurassic World, which set box office sales records when it was released about a week ago.  

It was an entertaining flick with some good visuals and graphics.  But, I also couldn't help seeing part of the film as an implicit critique against genetically modified food.  There is one scene where one of the bad guys is discussing the new transgenic beast they've created, and his dialog was almost verbatim from the talking points from pro-biotech groups.  A couple comments I remember him saying (though these aren't exact quotes)  were things like "nothing's natural here" and "we've been genetically modifying things since the beginning".  

In many ways the new animal they created reminds me much more of what might happen from mutagenesis (a technique widely practice in plant breeding for many decades and is NOT regulated as biotechnology, in which seeds are exposed to radiation or chemicals to cause mutations).  The reason I say that is  mutagenesis could cause several possible (and unexpected) genetic changes, which is exactly what happened with the dinosaur.  By contrast,  transgenic (or intragenic) biotechnology typically involves moving one gene from one species (or within a species) to another, in cases where it is well understood what the particular gene does.  

What the movie described as occurring with the dinosaur was pretty far flung as far as the genetics go. It was asserted that because the dinosaur had genes from a certain frog it could take on not only the intended frog-characteristic but also other frog-like characteristics, even supernatural type camouflaging that avoided heat sensing.   

In any event, one of the ironies of the move is (SPOILER ALERT) that the new genetically engineered beast is (partially) defeated by the evil genetic villains of the first movie - the velociraptors.  The story's hero has learned to train and communicate with the velociraptors.  So maybe the final lesson the movie makers are trying to get across isn't that all biotechnology is bad - just that we should sure we know how to control the technology to affect good ends.  

Alas, I doubt that's the lesson the millions of movie goers will take home.  Rather, they're more likely left with the impression that genetic modification is a dangerous, uncontrollable technology used by evil capitalists just to make a buck.  Even though there are hundreds of scientists trying to communicate with the public on this issue, they rarely (never?) have such an audience like this movie will draw.

Or, maybe I'm just reading too much in to it.  My kids were thoroughly entertained, and when I asked them what lessons they learned from the movie, neither mentioned anything remotely related to GMOs.  

How do people respond to scientific information about GMOs and climate change?

The journal Food Policy just published a paper by Brandon McFadden and me that explores how consumers respond to scientific information about genetically engineered foods and about climate change.  The paper was motivated by some previous work we'd done where we found that people didn't always respond as anticipated to television advertisements encouraging them to vote for or against mandatory labels on GMOs.  

In this study, respondents were shown a collection of statements from authoritative scientific bodies (like the National Academies of Science and United Nations) about the safety of eating approved GMOs or the risk of climate change.  Then we asked respondents whether they were more or less likely to believe GMOs were safe to eat or whether the earth was warming more than it would have otherwise due to human activities.    

We classified people as "conservative" (if they stuck with their prior beliefs regardless of the information), "convergent" (if they changed their beliefs in a way consistent with the scientific information), or "divergent" (if they changed their beliefs in a way inconsistent with the scientific information). 

We then explored the factors that explained how people responded to the information.  As it turns out, one of the most important factors determining how you respond to information is your prior belief.  If your priors were that GMOs were safe to eat and that global warming was occurring, you were more likely to find the information credible and respond in a "rational" (or Bayesian updating) way.  

Here are a couple graphs from the paper illustrating that result (where believers already tended to believe the information contained in the scientific statements and deniers did not).  As the results below show, the "deniers" were more likely to be "divergent" - that is, the provision scientific information caused them to be more likely to believe the opposite of the message conveyed in the scientific information.  

We also explored a host of other psychological factors that influenced how people responded to scientific information.  Here's the abstract:

“The ability of scientific knowledge to contribute to public debate about societal risks depends on how the public assimilates information resulting from the scientific community. Bayesian decision theory assumes that people update a belief by allocating weights to a prior belief and new information to form a posterior belief. The purpose of this study was to determine the effects of prior beliefs on assimilation of scientific information and test several hypotheses about the manner in which people process scientific information on genetically modified food and global warming. Results indicated that assimilation of information is dependent on prior beliefs and that the failure to converge a posterior belief to information is a result of several factors including: misinterpreting information, illusionary correlations, selectively scrutinizing information, information-processing problems, knowledge, political affiliation, and cognitive function.”

An excerpt from the conclusions:

“Participants who misinterpreted the information provided did not converge posterior beliefs to the information. Rabin and Schrag (1999) asserted that people suffering from confirmation bias misinterpret evidence to conform to a prior belief. The results here confirmed that people who misinterpreted information did indeed exhibit confirmation, as well as people who conserved a prior belief. This is more evidence that assuming optimal Bayesian updating may only be appropriate when new information is somewhat aligned with a prior belief.”