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Behavioural Economics - Combatting Obesity

Geoff Riley

30th June 2010

Charles Smart draws on some important lessons from behavoural economics to consider whether simple carrots or sticks or something smarter can have a noticeable impact on the obesity epidemic?The struggle to get people suffering from chronic obesity to lose weight has become a great focus of both government and individual concern. A recent NHS policy rewards those who lose weight with up to £450 over a 13 month period, yet has seen limited success. Thus a group of enterprising Yale economists have gone in the opposite direction, believing the proverbial stick to be more effective than the carrot.

Their website, stickK.com (Change starts now!) allows users to assign themselves a number of punishments if they fail to reach their weekly goals. For example, a user can bet on their future weight loss, thus if they fail to reach their target they stand to lose a substantial amount of money. Furthermore, users in need of more incentive to diet can opt to have their money donated to an “anti-charity"; a cause which they despise, for example the Labour Party. Finally, less money minded users can choose to be humiliated as punishment instead, with their failure to shed the pounds sent to all people in their contact book!. So far, the scheme seems to be working; there are over 1000 registered users in the UK, with 32,000 worldwide, and a claimed 85-90% success rate in fulfilling weight loss goals.

There are, of course, a number of economic theories at play here. On the face of it, basic rules of supply and demand mean that as the cost of eating food increases (through failing the goals and thus losing money), the personal demand for that food goes down, so thus the person eats less and/or more healthily.

However, below the surface much more of this scheme's success relies on behavioural economics.

Loss aversion means that the threat of losing money is much more powerful in spurring people to weight loss than the incentive of gaining it. Despite this, the vast majority of money oriented weight loss schemes rely on rewarding success rather than punishing failure. In Germany, for example, tax breaks are available to those who attend smoking cessations and dieting classes, whilst evidence from Newcastle University showed that people were 60% more likely to increase exercise levels when given a financial incentive to do so. Yet this still shows that financial benefit is less successful than financial loss. For one, users only increased exercise levels; there is no evidence that they actually lost weight. Furthermore, such schemes are both expensive to the government and ineffective in the long term as evidence suggests participants fail to reach their targets after a year or so.

Dan Ariely's oft-cited problem of procrastination and self control also plays an overarching part in the success of such projects. It is all too easy to set a personal weight loss target as the summer approaches, but a succession of parties and restaurant meals can easily mean the long term goal of weight loss is foregone for instant culinary gratification. Furthermore, weight loss can always be started “tomorrow". Without proper deadlines and penalties, all too often people slip back into their normal routine despite an initially noble attempt to do something about their weight.

Dan Ariely uses the example of students submitting papers during the semester. As the start of the semester, they are all eager to engage fully in the course, yet towards the end they suddenly realise they have three papers due by the end of the week. The solution offered by stickK.com is remarkably similar to that of Ariely's; namely that you allow people to participate in the deadlines. Ariely let his students choose their 3 essay submission dates, which if not abided by attracted punishments. Similarly stick.com allowed users to choose the amount of money they were fined if they failed to reach their weekly targets. In both cases participants were more likely to achieve their goals.

Furthermore, the regular weekly deadlines for weight loss meant that participants did not fall prey to the planning fallacy; namely that people often underestimate the amount of time it will take to complete a task; for example cleaning your apartment. One may think that it will only take a couple of weeks of intense dieting and exercise to slim down before a holiday, when it is actually a much longer term challenge. There are an infinite amount of events that could render your plan useless, so humans simply fail to take them into account. Thus forcing people to attain goals on a regular basis means they are never distracted from the task at hand and are thus more likely to be successful overall.

Unfortunately, the conclusion that must be drawn from this is that without deadlines and threats or incentives, humans are unlikely to have the self control and motivation to achieve their personal goals. However, with the help of an external authority we can overcome these irrationalities, and in the case of weight loss, this can prove to be successful indeed.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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