Losing weight is incredibly difficult. People who have put on unwanted pounds need all the help they can get to trim their waistlines. Will behavioral economics come to their rescue?
Behavioral economics builds on the insights of economics–on the rational ways people respond to incentives–by incorporating principles of psychology, especially ones relevant to the unconscious or even irrational forces that influence our behavior. For example, a straightforward economic approach to helping people lose weight would, say, pay people $25 for every pound they lose. According to economic theory, if you choose the right price, you should be able to get everyone to be as trim as you want them to be (barring some kind of health condition that prevents weight loss). You see, according to economic theory, at some point the benefits of money will outweigh the harms of having to lose weight–the pain of dieting and, god forbid, exercise–therefore causing a rational person to diet and/or exercise in order to lose weight and make the money.
By contrast, a behavioral economics approach might tweak that financial incentive, to trigger less rational psychologic impulses. For example, Kevin Volpp and colleagues at the University of Pennsylvania have conducted a slew–even a gaggle?–of studies where they present people with financial incentives in the form of lotteries. In one study, some people got a small amount of money every time they took their medications while others instead got enrolled into an actuarially equivalent daily lottery (with the same average amount of money paid out per person per day). People randomized to be in the lottery group were more likely to take their pills–the psychology of the lottery increased the economic impact of the financial incentive.
In a couple recent studies, Volpp and colleagues tested these behavioral economic interventions out on overweight and obese people. They ran experiments focused either on weight loss or exercise, randomizing people to one of several incentives.
In their exercise study, Volpp’s team told people they should try to walk at least 7,000 steps per day. They randomized people to one of four groups, all of which got daily feedback on how many steps they had walked.
- Control Group: Only received daily feedback
- Gain Group: Received $1.40 each day they met the goal
- Loss Group: Lost $1.40 each day they failed to meet the goal
- Lottery Group: Eligible to win either $5 or $50 each day they met the goal
Which group do you think walked the most? It was the loss group, who were so motivated to avoid losing money they walked more than everyone else. Here is a picture (Figure 2) of the results.
The other two intervention groups appeared to do a little better than the control group, but these improvements were not statistically significant. The people in the loss group, however, had a legitimate improvement. Building on one of the most durable findings in behavioral economics–the psychologic power of loss-aversion–the studies showed that the prospect of losing money hurts enough to motivate behavior.
Sadly though, as the figure shows, once the interventions stopped, people quickly reverted to their earlier behavior. Three months of walking every day wasn’t enough to create a walking habit, it seems. More on this problem later. But first let me tell you about the second study, one that tried to incentivize people to lose weight.