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The Paternalist Meets His Match

That is the title of a new paper that I co-authored with Bailey Norwood and Stephan Marette that was just released by the journal  Applied Economic Perspectives and Policy.  It will be coming out in their special issue on Nudge.

Here are a few excerpts from the paper: 

As illustrated by Nancy Reagan’s “Just Say No,” and Michelle Obama’s “Let’s Move!” campaigns, public figures are often interested in the choices made by others. Indeed, concern for other’s food and health choices is often manifested in public policy, from America’s 1920s-era prohibition on alcohol, all the way to today’s bans on trans fats. Some form of altruism is often indicated as the prime motivator for such paternalism (e.g., Arrow 1963; Jacobsson et al. 2007). Developments in behavioral economics have added fuel to the fire by suggesting that people’s health and food choices may not actually promote their own long-term well-being.

and

Yet, the conclusion that paternalism is warranted in light of the evidence of behavioral biases is typically a logical extrapolation, rather than a direct observation that paternalistic policies actually maximize efficiency or enhance welfare, however conceived. . . . The purpose of this paper is to study paternalism from both the perspective of the paternalist and the recipient of the paternalism (the person whom we refer to as the paternalee). That is, rather than taking evidence of decision-making biases as prima fascia justification for paternalism, we study how paternalists make decisions for others and how paternalees respond to decisions made for them.

From the abstract: 

Using data from over 300 people recruited from two cities in the United States and France, we study how choices between a relatively healthy item (apples) and a relatively unhealthy item (cookies) are influenced by one’s role as either the paternalist or the paternalee. We find that after being provided information on nutritional content, but not before, paternalists make healthier choices for the paternalees than for themselves. Surprisingly, prior to being provided information, paternalees desire healthier choices than they expect the paternalists to give, a phenomenon that seems to arise from a type of egotism where individuals believe they make healthier choices than everyone else. Results in both locations reveal that more than 75% of paternalees prefer their own choices compared to the ones made for them by the paternalists, and are willing to pay nontrivial amounts to have their own choices. Any intrinsic value people place on the freedom of choice must be weighed against whatever benefits might arise from paternalistic policies, and consequently the scope for paternalism may be narrower than is often purported.

 

How do you order at restaurants?

Yesterday, Alexandra Sifferlin at TIME.com wrote about some research I've worked on with Brenna Ellison at the University of Illinois.   Brenna collected data on what people order at restaurants and correlated that with what other people at the same table also order.  Here is a snippet from the TIME blog:

The researchers then created a model to assess how customers felt about their choices. Based on the popularity of menu items, the researchers determined the probability that individuals were satisfied with their choice. Interestingly, this gauge of satisfaction was influenced by expected factors such as price and calories, but also by fellow diners’ menu choices as well. They found that even if a customer initially felt less satisfied about their choice of say, a salad, they felt better about it if their friends ordered an item within the same menu category.
“The big takeaway from this research is that people were happier if they were making similar choices to those sitting around them,” study author Brenna Ellison, an economist at the U of I, said in a statement. “If my peers are ordering higher-calorie items or spending more money, then I am also happier, or at least less unhappy, if I order higher-calorie foods and spend more money.” So if you’re hoping to eat better, try dining with friends who do too.

You can read the actual research paper here.

 

Reduced Meat Consumption and Environmental Impacts

It is often said by environmental groups and by many in the media that eating meat is one of the worst things one can do for the environment. 

Just to give a few examples, NPR ran a series of shows last year about this time about meat.  In one of these shows, it was said  that meat consumption has: 

more of an impact on the environment than any other food we eat.

and Dan Charles, the NPR correspondent wrote meat production:

It's one cause of deforestation, global warming, water pollution, a lot of environmental problems

To give another example, Bryan Walsh, writing for TIME magazine in 2008 said: 

It's true that giving up that average 176 lb. of meat a year is one of the greenest lifestyle changes you can make as an individual.

And, of course, one can find even more polemical arguments that make a similar case, such as Mark Bittman's TED talk.

One of the bases for these claims are the greenhouse gas emissions caused by livestock production.  Estimates widely vary, but one common stat cited from the UN FAO is that livestock are responsible for 18% of all global greenhouse has emissions (note, however, some mistakes in their calculations have come to light suggesting this figure is inflated).  Some environmental groups put the statistic much higher, saying livestock production is "tied to" 51% of global greenhouse emissions (a figure I don't find many credible scientists supporting).  But our own EPA estimates that within the US that ALL of agriculture only contributes 8% of total greenhouse gas emissions from 1990-2011, and only 6.9% in 2011.  Livestock, thus must be something less than this (it was estimated at around 3% by the EPA a few years ago).   

I mention all this because of several news reports I've heard in the past couple days, such as this one from the Washington Post, indicating:

Greenhouse gas emissions from power plants and other industrial facilities declined by 4.5 percent from 2011 to 2012 as utilities continued to switch from coal to natural gas to generate electricity and produced slightly less power overall, the Environmental Protection Agency reported Wednesday.

Greenhouse gas emissions from these sources have declined by 10 percent in the two years since the EPA began compiling the data in 2010.

A 4.5% reduction in 1 year and a 10% reduction in two years is a sizable change. According to the EPA data, power plants account for 31% of total U.S. greenhouse gas emissions emissions.  Thus, a 10% decrease in power plant emissions results in a 3.1% decrease in total US emissions.  

How much would one have to cut livestock production to achieve this same 3.1% decrease in total US emissions resulting from a switch to natural gas (primary brought about, in part, by fracking technology)?  Well, simple math shows that it if you hold the share of greenhouse gas emissions by livestock constant, you'd have to reduce livestock production by more than 100% if you believe the EPA's figure (that 3% of all GHG emissions are from livestock) or 17.2% if you believe the UN FAO's number (that 18% of all GHG emissions are from livestock) to achieve the same outcome that we've actually witnessed in the last two years in part through fracking.   Yes, reducing livestock production might reduce greenhouse gas emissions, but it seems much more has been cut by a switch from coal to gas than we can probably ever expect by reducing meat consumption.  

It is also useful to add that technological change in has led to reductions in greenhouse gas emissions in livestock production.  One study in the Journal of Animal Science by Jude Capper calculates technological change from 1997 to 2007 has reduced methane  emissions by about 23% and carbon emissions by about 20%.  Indeed, the executive summary from the EPA's report on changes in emissions indicates a major reduction in methane emissions has come from changes in livestock production (emphasis added):

CH4 emissions, which have decreased by 8.2 percent since 1990, resulted primarily from natural gas systems, enteric fermentation associated with domestic livestock, and decomposition of wastes in landfills.

Food vs. Cash on the Daily Show

Somehow I missed this segment on the Daily Show last month.  It features Chris Barrett from Cornell University, one of the brightest agricultural/development economists in the country.  I thought he handled himself brilliantly given the circumstances. 

You can see the video at this link or embedded below.