The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life

by Gneezy, Uri

  The YAP program is certainly expensive—averaging $15,000 per student—but it’s nothing compared to the cost of incarceration, and for those it helps it does seem to stick. So far, while on most of the outcomes that we measured, the YAP kids are not different from the control group kids, none of the successful YAP kids have gotten into serious trouble after graduation; most of them, including Darren, have shown a dramatic improvement in behavior.

  Nevertheless, YAP can’t save all the at-risk kids in Chicago, and money is always tight, particularly for experimental programs. Even if they are lucky enough to qualify for YAP, many children, facing tremendous odds in their lives, simply give up and drop out. We need to continue to learn what works for these kids.

  The Silent Killer: Obesity

  Schoolkids—not just in Chicago, but all across the country—face another big threat: the danger of obesity, the rate of which has nearly tripled since 1980. According to the Centers for Disease Control and Prevention, 17 percent of children aged two to nineteen and one in seven low-income preschool-aged children are now obese. Obviously, these kids are spending too much time on the couch and not enough time exercising. And they are eating too much high-fat, processed food—not just at home, but also at school.

  We call obesity the “silent killer” because most people do not understand just how deep the problem runs. A 1999 study that appeared in the Journal of the American Medical Association concluded that 280,000 to 325,000 US adults die each year due to obesity. That is one person every few minutes, or nearly forty deaths an hour. This rate of death exceeds many other well-known killers, such as drunk-driving fatalities and breast cancer.

  Most adults barely remember—or have repressed—what the “lunch ladies” in hairnets and white smocks served them in the school cafeteria. There were “burgers” made of a quizzically brown meatlike substance pressed between white bread buns. Pigs-in-a-blanket made mostly of bread, with a tiny hot dog hidden within. Stale French fries. Bagged lettuce, which passed for a vegetable offering, doused in ranch dressing. Instant mashed potatoes spooned over with an unidentifiable gravy, pocked with cubed giblets. The kind of stuff that you wouldn’t feed your dog, but too many American parents, or the government, pay for their kids to eat it anyway.

  One night in March 2010, millions of TV watchers tuned in to watch Jamie Oliver, the famous British chef, go on a rampage in a school cafeteria in the town of Huntington, West Virginia, dubbed the unhealthiest city in America (because half the adults are obese). His goal was to improve what the town puts in its collective mouth. Oliver said he didn’t like what he was seeing. Pizza for breakfast, followed by a lunch of chicken nuggets?

  The lunch ladies were, not surprisingly, defensive. Why was Oliver picking on them and not their boss? “Those things are set up on a monthly basis by a nutritional analysis on the meals,” said one lady, pointing to the label on a container of frozen chicken nuggets that Oliver had yanked from their very disappointing freezer. “The first ingredient is white meat chicken.”

  But as Oliver moved down the list of ingredients it was hard to find another pronounceable name. The majority of the list was unrecognizable chemicals designed to improve the freezer-hardiness, cohesiveness, springiness, chewiness, and gumminess of the chicken-like substance, including things like sodium benzoate, tertiary butylhydroquinone, and dimethylpolysiloxane. Oliver held a nugget up. “Would you eat that?” he asked the ladies. “Yes,” one of them replied. “It’s good!”

  The US School Nutrition Association took umbrage at Oliver’s charges and issued a countervailing press release, arguing that a 2009 survey of more than 1,200 school districts across the country “found that nearly every school district offers students fresh fruits and vegetables, low-fat dairy products, whole grains and salad bars or pre-packaged salads. Most schools still bake items from scratch in their kitchens, and school districts are offering more vegetarian meals and locally sourced foods. School nutrition programs have reformulated kid favorites to make them healthy, like pizza prepared with whole wheat flour, low-fat cheese and low-sodium sauce.”5

  Obviously, something between the lunch ladies in Huntington, the School Nutrition Association, and Oliver got lost in translation. But to its credit, the US federal government is, in fact (slowly, painfully), trying to improve matters to the tune of around $1 billion in annual spending. In 2011, the US Department of Agriculture (USDA) overhauled its school nutritional guidelines for the first time in fifteen years. But in November of that same year, Congress pushed back on the USDA’s healthier school lunch standards by limiting some of the USDA’s aggressively pro-health policies (prompting late-night comedians to poke fun at the idea that the tomato sauce on pizza and French fries are still to be considered vegetables). In spite of this setback, a spokesperson for the School Nutrition Association says that they expect most schools to continue to follow the USDA guidelines for healthier lunches.

  Despite all the good intentions, here is the big problem: most kids still prefer French fries and pizza to spinach and apples. While many schools have tried to introduce healthy options, such as fruit instead of desserts, kids tend not to choose them—and even if they do choose them, they don’t end up eating them. Some parents try very hard to instill a love for broccoli and brown rice in their kids, only to find themselves defeated by the influence of grocery store checkout lines and well-meaning but uninformed relatives, friends, and neighbors.

  Aside from the fact that their taste buds have been spoiled, kids face another problem, of course: they have no long-term perspective, as we discussed in Chapter 4. Popeye ate his spinach, but if you tell a child “eat your veggies because it’s good for you, and it will make you grow up big and strong,” you’ll be met with a blank stare. Children aren’t thinking about their future health (or future anything, with the possible exception of their birthdays).

  In Chapter 1, we talked about using incentives to make people exercise more, showing that paying students to visit the gym for a month made a change in their habits. Could the same kind of incentive work here? What does it take to get kids to choose fruit over cookies? To find out, we worked with the Chicago Food Depository to set up a study involving 1,000 schoolchildren in the Chicago area, where we worked with after-school meal programs to see what could entice children to choose healthy food. In our experiment, we first told kids in one group, “Today we have some extra desserts. Would you like a cookie or these dried apricots?” Predictably, 90 percent of the children went for the cookies.

  Next, the children received some nutritional education, in which they were taught the importance of eating healthy fruits and vegetables and got to do fun things like drawing their own colorful food pyramids. After the program, we offered the children the same choice—cookies or fruit? To our (predictable) chagrin, the nutritional program didn’t make a dent in their preferences. The kids still went for the cookies.

  So we tried yet another treatment in which we told a different group of children, “You can have either a cookie or fruit. If you choose the fruit, you get a prize!” (The prizes were a small rubber ducky in fruit colors, a wristband, a pen imprinted with the words “eat strong to be strong,” or a fruit keychain.) This time, 80 percent of the kids ate the fruit, compared to just 10 percent when there was no prize offered. We were also delighted by what happened when we combined the educational program with the prizes. When we came back a week later, 38 percent of the kids were still choosing and eating the fruit—demonstrating that some of the kids were beginning to accrue some longer-term good habits.6

  A slightly different approach produced an even more positive result. We moved back a few steps to think about what happens in grocery stores. “Packaging and placement is something every grocery store does,” Ron Huberman observes. “Why not apply that to institutional food?” (It’s true: if you put the healthy food in a brightly lit, attractive, easily accessible place, and put the less healthy stuff in the aisles, more people will move to the “healthy” areas.)7
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  We started by eliminating the bad choices and replacing them with healthier ones, but—and this is important—we didn’t stop there. One innovation was to replace the chips at the front of the lunch line with bags of sliced apples. This did the trick, Huberman thinks, because the packaged apple slices were less daunting than choosing a gigantic apple with skin that gets stuck in braces, and because we made the chips harder to get. The chips and cookies were put in a place where the kids had to ask the lunch lady to get them. Who wants to ask the grouchy lunch lady for anything? Effectively, we changed the cost of consumption. As Huberman says: “Make it hard for them to ask for the cookie and make it easy for them to grab the sliced apple.” Duh.

  The net-net? Once again, it’s all about adaptation—combining nutritional education with healthy choices and making sure those choices are much more appealing than the less healthy ones will make the difference.

  Nudges Versus Nuisances to Save Lives

  A week before Thanksgiving in 2012, John’s father-in-law, seventy-three-year-old Gary Einerson, lay in a hospital bed in the Intensive Care Unit of the University of Wisconsin’s hospital, while the Grim Reaper patiently waited for him to breathe his last. Once an athletic, six-foot-two-inch, 200-pound college basketball player, he was known as a no-nonsense high school principal who got things done at Deforest High School, just outside of Madison. Awaiting a liver transplant, Gary had shrunk to just 138 pounds. The doctors said that if they failed to secure a matching liver within a few days, Gary would not survive. But he was fortunate: a liver, possibly from a nineteen-year-old boy killed in a car accident near Madison, arrived just in time. The transplant was successful, and Gary went home on Thanksgiving Day. The oldest organ recipient in the hospital’s history, Gary is today gaining weight and doing well.

  According to the US government website organdonor.gov, eighteen people die every day while waiting for an organ; a single organ donor can save up to eight lives. You have doubtlessly heard the heart-wrenching pitches about the need for organ donors. The pitches go something like this:

  My cousin Janice, a mother of two small children, discovered that she needed a new kidney. Twice a week, she had to endure kidney dialysis. Of course, she put herself on an organ waiting list right away. If she didn’t get a new kidney, she would die. Twice over the period of a year, she received a phone call saying that a kidney from an organ donor was available. But these kidneys were not a good match for her, so she had to keep waiting and waiting, becoming sicker and sicker in the process. One day, she received another call. This time, the kidney was a good match. A woman had died in a car accident, and she was an organ donor. That generous woman’s kidney saved Janice’s life.

  Given the need for organs, policy makers in some US states and around the world have made it easier to locate donors.8 When you go to conduct some official business, such as getting your driver’s license renewed, you can “opt in” (meaning that you give explicit consent to be a donor) or “opt out” (if you don’t refuse, you’re going to be a donor by default). Strong evidence suggests default opt-out policies increase donor consent rates. For example, countries with opt-out policies, such as Austria, have higher donor rates—as high as 99 percent, while countries with opt-in policies, such as Germany, see donor rates of roughly 12 percent.9

  This kind of default opt-out system is a perfect example of what our colleague, University of Chicago behavioral economist Richard Thaler, calls a “nudge.” A nudge is, very simply, a way of making tiny shifts that change people’s behavior for the better without their being aware of it. In their book Nudge, which Thaler coauthored with Harvard law professor Cass Sunstein, the authors take note of policy changes that have subtly coerced people to make smarter choices, like making it easier for kids to choose fruit or salad rather than cookies or chips.

  Although an opt-out system has worked quite effectively in various settings (and it sounds like a great way to get lifesaving organs to people who need them), the problem with signing people up in such a manner is that some find it deceitful. Objectors might think that if they are going to be kind enough to give away their precious kidneys following a fatal accident, it might be polite to at least ask them beforehand to make an explicit rather than an implicit promise.

  In 2007, we teamed up with Dean Karlan of Yale University to see whether it would be possible to increase donor rates even if we were explicit about it.10 In our case, we decided to see what we could do to raise donations of corneas, which are in short supply. We worked with a nonprofit called Donate Life, whose mission is to increase organ donation, and ran an experiment that pitted nudges against a different approach—“nuisances.”

  As it happened, the state of Illinois had recently introduced a new system of donor registration. People who had been previously registered as organ donors needed to reregister as a result of a change in the law. So we ran a test in which our research assistants talked to more than 400 households in various neighborhoods around Chicago. The students told people that because of a new driver registry, they unfortunately might not be registered anymore. Then the students popped the big question: “Would you like to receive information on signing up as an organ donor?” If they chose to opt in to receiving information, they filled in a form with their name, address, gender, date of birth, and so on. Of those we asked, 24 percent signed up, giving us our baseline group.

  But what if we changed the default option and households had to opt out in order to not receive any information? In another treatment, people who didn’t want the information had to fill out the same form with their names, addresses, and so on if they wanted to opt out. This time, 31 percent of the people we asked signed up. It looked like changing the default was enough of an incentive to get more people to participate.

  In yet another test, we made the signup form much shorter. In fact, all people had to do was write down their names to receive information from Donate Life. This time, 32 percent of people signed up to receive the information. This result showed that we could still get more donors this way than we could by directly asking them to opt in.

  The results showed that reducing nuisances—and saving people time and hassle—worked slightly better than nudges, which means we do not necessarily need to use default to achieve the same level of success when signing people up. We can be explicit and still achieve better sign-up rates.

  These results have potentially important implications beyond donating organs. For instance, Americans don’t save enough for retirement. To increase peoples’ savings rates, many argue that the default trick can work well. Our results suggest that simply lowering nuisances and explaining savings rules, clearly and simply, might do a similar trick. Likewise, reducing nuisances in helping make the right choice of health plan can go a long way toward getting them enrolled. (Of course, we’d need to do more field experiments to see whether such incentives could work.)

  A Threat to Us All: Global Warming

  Global warming poses one of the biggest threats to humans. Hurricane Sandy, which devastated large swaths of New York, New Jersey, Pennsylvania, and other areas, was just an appetizer for what looks like a full and endless meal of climate-related disasters coming our way. According to the National Climate Assessment released in January 2013, “certain types of weather events have become more frequent and/or intense including heat waves, heavy downpours and in some regions floods and drought. Sea level is rising, oceans are becoming more acidic, and glaciers and Arctic sea ice are melting.”11 The experts are more or less in agreement that the future will bring hotter, drier summers; wetter and more devastating storms; shut down power and transportation; and wreak havoc on food and water supplies.

  To fight this scenario, inventors around the world are working hard to develop new technologies that can help to mitigate the global warming problem. But it’s sometimes difficult to get people to adopt those technologies. How can field experiments help?

  In search of an answer, we conducted a field experiment that revolve
d around lightbulbs. Currently, only about 11 percent of potential sockets in houses have compact fluorescent bulbs, or CFLs. Protecting the environment, of course, has a lot to do with the small changes we all make in our lives. In fact, if every household in the United States would replace just one incandescent lightbulb, we would prevent nine billion pounds of greenhouse gas emissions per year, equivalent to those from about 800,000 cars., and save $600 million in energy costs.12

  To that end, President George W. Bush signed the Energy Independence and Security Act in 2007. The Act stipulated, among other things, that old-fashioned incandescent lightbulbs had to go away because they were energy-inefficient. Unfortunately, their replacements—compact fluorescent bulbs, or CFLs—were no great shakes. They flickered. Their light felt coldly institutional. Performance was iffy. They didn’t work well in the cold. They contained mercury, making them difficult to dispose of and a problem if they broke. Resenting the new bulbs, a lot of people went on buying sprees to hoard the old ones.

  The quality of CFLs has improved a lot since 2007, but many people are still holding a grudge against them, and some in Congress want to outlaw them. So what would it take to get people to get over their prejudices and switch to CFLs? As it turns out, this is a more complex process than one might think, because it involves a combination of peer pressure and pricing.

  One big, persuasive tool in changing behavior is applying “social norms”—that is, subtle keep-up-with-the-Joneses cues that get people to follow others. Social norm cues are everywhere. When all the other parents arrive on time to pick up their kids from day care, that’s a social norm cue. When you see a commercial on television telling you that “7 out of 10 customers agree” that a certain kind of cereal, toothpaste, car, or any other item is a good one, that’s a cue. And when you go into a hotel bathroom and see a sign that says “73 percent of the guests who have stayed in this room have reused their towels,” that’s another cue.13