Reconciling Economic Decision Theory with Dietary Choice

1
Reconciling Economic Decision Theory with Dietary
Choice
Trenton G. Smith UCLA March 11, 2004
2
Obesity and Economic Theory

• Simple economic theory of obesity
• Consumers who overeat rationally trade current
  pleasure for future (health/social/economic)
  consequences of being overweight.
• But
• Information, time
• nutrition science complex, incomplete
• health effects can span decades
• Psychology and genetics of dietary behavior
• Junk food effect
• all calories are not created equal

3
The Determinants of Diet in Humans and Other
Animals

• Dietary habits (largely) formed in childhood
• Three categories of cues determine dietary
  choices in children
• Chemical
• Ex sweet/salty/bitter/sour
• Postingestive
• Ex nausea/satiety
• Imitative
• Ex peers/parents/conspecifics
• Food as a natural addiction

4
Why Do We Like Sweets?

• In natural environments, foraging animals solve a
  difficult and potentially lethal diet problem.
  Hazards include micronutrient deficiency,
  poisons, and pathogens
• The cues that influence dietary habits provide
  valuable information in natural environments
• Ex distribution of sugar
• Ex nausea aversion
• Ex imitation

5
The McDonalds Equilibrium

• Modern fast-food and snack-food industries take
  full advantage of our dietary predilections
• Menu sweet, salty, calorie-intensive
• (makes use of chemical and postingestive cues)
• Marketing content of food ads aimed at
  childrenimagery but little (useful) information
  
• (makes use of imitative cue)
• Subjective probabilities (that a food is safe
  and has nutritive value, given informational
  signals) inferred from environmental cues once
  characterized an optimal solution to the consumer
  search problem.
• Today food production and marketing technology
  has altered the information implicit in the cue,
  but the behavior remains. In other words, people
  appear to choose foods on the basis of false
  beliefs.

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Implications for Public Policy

• The mismatch between the modern marketplace and
  information encoded in the human genome implies
  that consumers will systematically underestimate
  negative health consequences of modern diet.
• Many existing public policies are consistent with
  this view limitations on advertising of alcohol
  and tobacco, addition of B-vitamins to enriched
  flour, product-specific taxes on soft drinks and
  snack foods, Coke pull-out
• But A world without sugar? (I hope not!)
• Equilibrium Selection Would we be better off
  ifas childrenwed been exposed to television
  ads for something other than empty calories?