Economics Behaving Badly

[groovedaddy]

IT seems that every week a new book or major newspaper article appears showing that irrational decision-making helped cause the housing bubble or the rise in health care costs.

Such insights draw on behavioral economics, an increasingly popular field that incorporates elements from psychology to explain why people make seemingly irrational decisions, at least according to traditional economic theory and its emphasis on rational choice. Behavioral economics helps to explain why, for example, people under-save for retirement, why they eat too much and exercise too little and why they buy energy-inefficient light bulbs and appliances. And, by understanding the causes of these problems, behavioral economics has spawned a number of creative interventions to deal with them.

But the field has its limits. As policymakers use it to devise programs, it’s becoming clear that behavioral economics is being asked to solve problems it wasn’t meant to address. Indeed, it seems in some cases that behavioral economics is being used as a political expedient, allowing policymakers to avoid painful but more effective solutions rooted in traditional economics.

Take, for example, our nation’s obesity epidemic. The fashionable response, based on the belief that better information can lead to better behavior, is to influence consumers through things like calorie labeling — for instance, there’s a mandate in the health care reform act requiring restaurant chains to post the number of calories in their dishes.

http://www.nytimes.com/2010/07/15/opinion/15loewenstein.html?th&emc=th

[AndyTiedye]

1. He Wants to Solve the "Obesity Epidemic" by Making Food So Expensive that Poor Folks Can't Afford It

The author of this article wants to employ the same "behavioral economics", but he wants to replace all the carrots with sticks.
Note that he wants to raise the price of all the cheap foods, but says nothing about lowering the prices of healthy food.

Raise the price of gas so people can't afford to drive.
Raise the price of food so people can't afford to eat.

Screw that!

LET THE PEOPLE DANCE!

We didn't have an "obesity epidemic" when the rave scene was flowering.
It started after the cops came and shut most of it down.

Places that still have a flourishing dance scene tend to have less obesity.
Places where dancing is regarded as EEEEVIL have the highest obesity rates.