Behavioral Economics and Public Policy 102: Beyond Nudging

The United States, despite its affluence, faces a number of daunting policy challenges. We rank last among 16 wealthy peers in life expectancy, infant mortality, and obesity, and have taken very little action on climate change, despite the extremity of the threat it poses not only to future generations but even those alive today. Complicating matters is that the causes of these policy problems are multi-determined and can be engaged at different levels of policy analysis. For example, while obesity is proximally due to the (persistent) intake of excessive calories, it can also be attributed to more intermediate causes such as innovations in food production and delivery which have lowered the cost of consuming (largely unhealthy) foods, to policy decisions such as the subsidization of corn (and hence corn syrup), or even to more deeply structural factors, such as the sociocultural forces that have promoted the availability of “ super-sized” portions and physical inactivity. To combat obesity, a policymaker must decide whether to intervene proximally (e.g., mandating caloric displays), or more distally (e.g., reducing access to low-nutrient foods). Economics offers a useful framework for thinking about policy. However, the traditional approach in economics, by assuming fully rational and perfectly informed individuals, assumes away many potentially problematic behaviors. Recognizing human limitations and their consequences, many policymakers have embraced