Weight Loss Nudges: Market Test or Government Guess?

As we edge further into the new year, many Americans have already fallen off the wagon and are back to their old eating habits they resolved to break this year. There is no shortage of hucksters who use New Year’s resolutions to promote their fad diets to Americans, but researchers have yet to provide a clear understanding of obesity, let alone how to cure or prevent it.

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Some behavioral economists have suggested that well-designed “nudges” can steer individuals toward weight loss. Those who decide the direction in which people will be nudged, choice architects,” are believed able to promote healthier consumption by individuals suffering from various psychological, social and emotional factors that cause them to be obese.

Some nudge theory advocates believe that nudging individuals toward healthy choices is often best left to governments since markets give companies irresistible incentives to exploit – for profit –human frailties to overeat. However, evidence suggests that market nudges work best.

The obesity rate has doubled over the past three decades, with some projecting that 42 percent of Americans will be at least 100 pounds overweight by the year 2030. The association with diabetes, stroke, heart disease and certain cancers has made obesity a public health concern – and a personal concern for the 51 percent of Americans who want to lose weight, according to a recent Gallup poll.

Despite the good intentions of government choice architects, they fall prey to widely-held weight loss beliefs that simply are not supported by science.

For example, in the Department of Agriculture’s “Choose My Plate” suggests eating more fruits and vegetables to promote weight loss even though a recent study in the American Journal of Clinical Nutrition found that although fruit and vegetable consumption has demonstrable health benefits, weight loss is not one of them unless individuals also reduce intake of other foods.

Past experience with government nudges supporting low-fat diets also suggests caution since promoting diets rich in complex carbohydrates such as breads, cereals, rice, pasta, potatoes and other starches may have unintentionally promoted obesity.

Markets nudge all the time, but unlike the government, receive direct feedback from customers.

Markets hold significant advantages over governments. Consumers directly signal to sellers which products are ineffective. They simply stop buying them. Harmful products might yield costly lawsuits directly aimed at businesses. Businesses read these signals routinely because they threaten their financial health.

Government nudging suffers from higher hurdles in getting nudges “right.” Their nudges do not have to withstand consumer scrutiny, nor do revenues do not rise or fall to signal the good from the bad. Government employees typically are not fearful that failed products place their jobs in jeopardy.

While many Americans’ crash diets may not have even made it through the first month of the New Year, a majority of them do want to lose weight and nudging plays an important role in helping them do so.

But, nudging consumers toward healthier eating is best left to the private market, not the government.

Michael Marlow is professor of economics at California Polytechnic State University in San Luis Obispo. His paper “Market Test or Government Guess? Are Government Efforts to ‘Nudge’ Us to Lose Weight Really Based on Science?” appears in the current issue of the Cato Institute’s journal Regulation.