Afternoon roundup

The browser tabs...

• The Internet Archive will help improve access to a lot of books currently held by the National Library. Naturally, this upsets some people. 
• Mike Joy wins a battle over what "natural levels" of nitrate in aquifers might mean.
• Places where the local schools are funded by higher levels of government wind up trying to privatize the public schools through zoning. Everything's tradeoffs though, eh? If schools are funded by the local communities, poor places get really bad schools. It's instead a good argument against even greater anti-NIMBY vigilance.
• Potential nudges to improve compliance with scanning-in for Covid tracing. I'd add one more: put the QR codes in lots of places. Make it easy. At the entrance is great, but if your phone isn't ready and you'd be holding up a queue, maybe you won't scan and you'll forget to on the way out. Put them everywhere. 
• The EMA makes a very bad argument about unemployment rates. The point of inflation targeting and increasing rates when you're hitting capacity constraints isn't to create some stupid Marxist reserve army of unemployed, which seems to be what they're arguing for. The point instead is that if a monetary push gets you past NAIRU, you just wind up back at higher unemployment rates anyway once contracts adjust AND you have higher inflation to go with it. Anyway, because either EMA put it badly or it was reported badly, a billion tweets followed claiming the Marxists were right all along. 
• Heather du Plessis-Allan cites me here on Treasury's diminished capabilities. Worth noting: all of that was prior to the current Secretary's appointment. She may well have improved things since; I need to get OIAs in to check. 
• Shipping is a mess.
• Remember back at the Budget Economic and Fiscal Update when Treasury put in a footnote saying they couldn't produce a structural deficit figure this time round because they couldn't tell how to place some of the Covid-spend? And it seemed odd because Covid-spend is supposed to be emergency = one-off = not-structural? Well, looks like the free school lunch programme is Covid spend. I simply do not understand how this works. Shouldn't the Auditor General be going after this kind of thing as misappropriation? 
• The government isn't bothering to check on whether people got their Covid tests before travelling. Some of them get caught ex-post, with the option to go into quarantine or return to Oz, after they've been circulating in New Zealand already. If they went back to Oz and turned up positive, what hope would we have on contact tracing them? However low your expectations of government competence are, you just keep being surprised. 

Ration books

The IEA's Chris Snowdon tries to live by the ration book that The Lancet's public health people would impose on the UK.

First up, the recommended diet, from page five of their report.

I like that they have a 31 gram ration of sweets.* 

Anyway, Chris does his best. But it doesn't look all that appealing. 

Here's breakfast:

[WATCH] The IEA's very own health warrior @CJSnowdon decided to try the @TheLancet's delicious nutrition guidelines for breakfast this morning! 🥓🍳 pic.twitter.com/0zJhqQTs6T

— IEA (@iealondon) January 17, 2019

And lunch

[WATCH] Part 2 of the IEA's @CJSnowdon following @TheLancet's nutrition guidelines. Doesn't that beef sandwich look like the stuff that dreams are made of? 🥪https://t.co/h9cdxIgoUx pic.twitter.com/ncsEuMAAgp

— IEA (@iealondon) January 17, 2019

And, finally, dinner for a hungry Chris.

[WATCH] Part 3 of @cjsnowdon following @TheLancet diet. 🍗

Not a fan of the diet yourself? "You don’t need to worry about choice or personal responsibility. They’re gonna use a system of taxes and bans... to make sure you don't really have much choice!"https://t.co/h9cdxIgoUx pic.twitter.com/Sscnswc5aQ

— IEA (@iealondon) January 17, 2019

As Chris points out, it's nice that this crowd has outlined an end-goal for once rather than the series of nibbles that always otherwise come with denials that there's a next step just around the corner. The report recommends measures like zoning bans on unhealthy food outlets, taxes and subsidies, reduced choice, reduced portions - and some non-daft things like finally getting water and effluent pricing right. But they have the whole thing back-to-front. 

Food choices shouldn't be targets. They should be the outcomes that emerge when distortionary subsidies are removed and when environmental effects are properly worked into prices. I'd be surprised if models that appropriately incorporated full environmental costs didn't result in changes in those choices. But you don't force it by nudges and shoves to get particular menus; you just make sure that prices incorporate costs properly and let people make whatever choices they want within that. 

* We can thank them for increasing the chocolate ration from 20 grammes to 30. 

Afternoon roundup

This afternoon's worthies on closing out the accumulated browser tabs:

• Russell Brown on cannabis reform, including links through to reasonable critiques of the Berenson work that's been floating around.


• Some excellent data work by Mike Reddell looking at the time path of employee compensation in NZ. Labour worries a lot about what they see as a declining labour share of income. Here are the key graphs.
  
  First up, employee compensation as fraction of GDP, adjusted for production taxes and subsidies. It's up on where it was in the 90s, but has been flat for the past decade.  
  
  
  
  Next up, wages as fraction of nominal GDP per hour worked:
  
  
  Reddell's summary:

  There is a fair bit of short-term noise, but the trend is pretty clear. On this data, wages have been rising faster than the overall earnings capacity of the economy. That was so in the 00s, and has been so – albeit to a lesser extent – in recent years too. For anyone inclined to want to debunk the analytical unadjusted series, note that this chart is not wildly inconsistent with the labour share chart I showed earlier: the labour share of total income has increased since the early 00s, with the biggest change occurring in the pre-recession 00s themselves.

  The underlying problem remains low productivity growth.


• Labour markets remain tight.


• These wonderful maniacs coded folklore from 1,000 pre-industrial societies to look for common traits that could be used in testing social science conjectures. Pastoral oral traditions have more motifs of anger and retaliation; foraging societies have more leisure-related motifs; political centralisation correlates with more use of trade and money words and with respect-related motifs. And old folklore predicts current views about things like toleration of socially deviant behaviour. Read! 


• Nudges are far less beneficial when we consider the psychological costs imposed on the nudgees. 


• Peer effects matter. Or, an argument against school zoning rules that concentrate disadvantage.


• Requiring a job search period before benefit uptake can be rather beneficial. It increases earnings and reemployment, without worsening health or crime outcomes.  


• Informal governance matters in disaster planning. I'm reminded of last year's Christchurch Earthquakes Symposium, where Hurunui District Council's Hamish Dobbie explained [my take on part of his talk] how their Council worked to enable civil society organisations rather than supplant them after the Kaikoura earthquakes. 


• And finally, Nate Silver:

  How my brain interprets every Brexit explainer: https://t.co/7smQVKMP76

  — Nate Silver (@NateSilver538) January 15, 2019

Default risk - nudge edition

Kiwisaver, founded on the premise that people are too quick to stick with defaults, finds that too many people stick with its default plans.

Recall that the whole thing was based on the idea that opt-out plans have more subscribers than opt-in plans: defaults matter. If the default is that you're out unless you actively opt in, fewer people opt-in than would opt-out if you flipped the default around.

And it was set up with pretty conservative fund default options. New workers entering jobs would be default opted into conservative funds - not typically the most recommended option for new workers, although perhaps there's a caveat in New Zealand where some could be using Kiwisaver for a house deposit rather than retirement.

Here's the default fund at Westpac (chosen only because they were the default into which I was set when I started the new job).

Default members (being members who have been allocated by Inland Revenue to the Westpac KiwiSaver Scheme because neither they nor their employer has not chosen a KiwiSaver Scheme) have their contributions invested in the Defensive Fund. The Defensive Fund aims to provide stable returns over the short to medium term with low levels of volatility and investment risk. The Fund invests primarily in income assets but is required by the Instrument of Appointment (under which, the Government appointed us a default KiwiSaver provider) to have an allocation to growth assets of not less than 15% and not more than 25%. Returns will vary and may be low or negative at times. This Fund is suited to investors who have a low risk tolerance or are investing for a short investment timeframe.

NBR chatted with KPMG's head of financial services:

“A lot of people are staying in the default schemes assigned to them when they sign up and, while at least they are in KiwiSaver, it shows they are not thinking too much further about what it means.”

And Morningstar agrees:

Morningstar research manager Elliot Smith says this is a concern, and assigning default members into conservative funds is a major flaw of the system.

“In Australia, most default funds are in the growth or aggressive categories, which is far better aligned with the long time horizon of investing for retirement.”

However, he says some providers are actively trying to get members to determine their appropriate risk profile and switch.

 Treasury's shown that Kiwisaver's not done much to overall savings rates. But if it's affected portfolio choice where too many folks reckon the default must be good enough or the government wouldn't have set it as the default, well, we have to be careful with nudges.

The pure distillation

The funniest part of this anti-sugar piece from Lustig and his UCSF team? Here:

Sugar, they argue, is far from just “empty calories” that make people fat. At the levels consumed by most Americans, sugar changes metabolism, raises blood pressure, critically alters the signaling of hormones and causes significant damage to the liver – the least understood of sugar’s damages. These health hazards largely mirror the effects of drinking too much alcohol, which they point out in their commentary is the distillation of sugar.

If you set up a still with a sugar cube on one side, you might get a bit of water vapour out the other end after trying to distil, and, if you're lucky, caramel in the original flask. Mmmm, caramel. But to get alcohol, you're going to have to ferment that sugar with some yeast. Distillation gets you spirits from fermented alcohol.

The less funny part? The way the whole nudge apparatus has been imported over.

Many of the interventions that have reduced alcohol and tobacco consumption can be models for addressing the sugar problem, such as levying special sales taxes, controlling access, and tightening licensing requirements on vending machines and snack bars that sell high sugar products in schools and workplaces.

“We’re not talking prohibition,” Schmidt said. “We’re not advocating a major imposition of the government into people’s lives. We’re talking about gentle ways to make sugar consumption slightly less convenient, thereby moving people away from the concentrated dose. What we want is to actually increase people’s choices by making foods that aren’t loaded with sugar comparatively easier and cheaper to get.”

No, it's not prohibition. Not yet. This was an entirely foreseeable and foreseen consequence of Thaler's nudge architecture, but taxes and licensing requirements on vending machines are hardly "make the tempting thing slightly less convenient" nudges.

Andrew Stuttaford at NRO also doesn't like the idea that this somehow increases people's range of choices.

What they “actually” mean by that is that sugar-heavy products will be made more expensive and more difficult to obtain thereby making it easier for the child-like American population to “choose” the healthier alternative.

A shove's as good as a nudge to a blind bat....

Another for the "there's no slippery slope" file.

Organ nudges

It's hard to tell what's a nudge.

Recall the basic thesis of Thaler and Sunstein's libertarian paternalism: the choice of defaults couldn't help but influence choices, so give some thought to the default chosen.

In New Zealand, and many other countries, you're not an organ donor unless you make an explicit choice to become one: you have to choose to sign your organ donor card. Because thinking about death is unpleasant, there will be some people who would wish to sign their card but haven't gotten around to it. The default has affected the number of people signed up. Flip the default around to presumed consent, where those who do not wish to be donors have to opt out, and you'll have higher donation rates. And indeed, that's what's found in most countries running presumed consent systems.

Can we call this a nudge though? A team of researchers running an international comparative study of nudge policies think so.

In early July the passage of the Human Transplantation (Wales) Bill through the Assembly made Wales the first UK nation to adopt a presumed consent system for organ donation.

The Bill, which comes into effect in 2015, should undoubtedly be celebrated: it will lead to far more people being on the Organ Donor Register in Wales, as presumed consent systems have in other countries where they have been introduced, and it will save lives.

The historic significance of the Bill, however, lies not only in the lifesaving difference it will make, but in fact that it is the most discussed aspect of a broader shift in systems of government in Wales and the UK.

This shift is characterised by the increasing use of psychological insights about the nature of human behaviour within the design of public policy.

Commonly referred to as “nudge” policies, these new ways of governing are based on the principles of soft paternalism, or the idea that governments should use policies to make it easier for people in act in ways that support their own, and the broader public’s, best interests.

Nudge policies are clearly in vogue.

It seems like a nudge. Flip in default position? Check. Easy opt-out? Check. But wait:

Bad idea “@ideas42: Wales has become the first country in the Uk to adopt an opt-out policy for organ donation: http://t.co/Cy3gg9uhUO”
— Richard H Thaler (@R_Thaler) September 25, 2013

Bad idea? Why?

To be clear I prefer prompted choice for organ donation. Wales "soft opt out" where families are asked is esp bad since no opt in list.
— Richard H Thaler (@R_Thaler) September 26, 2013

I agree with Thaler that there's nothing wrong with a prompted choice system.

I don't know enough about the system in Wales. New Zealand's opt-in system doesn't really have a list; families are asked whether or not the donor has ticked the box on the driver's licence. If they're moving in Wales from a system that never asks families while presuming you're out absent having signed an organ donor card to one where you're presumed in but your family can veto, then that does impose burden on the families. The change imposes a burden, and that burden counts:

@leemovic @ideas42 opt out puts burden on family members who have no clue of donor's wishes. I prefer prompted choice as in Illinois and CA
— Richard H Thaler (@R_Thaler) September 25, 2013

Policy has to be very specially crafted to count as a nudge, following Thaler's setup. Thaler entirely disavows any connection between the UK's internet porn filter and his nudge prescriptions because of the burden the opt-in regime imposes on families who might prefer not to have to have explicit conversations about such things. Just because something is opt-out doesn't make it a nudge, in Thaler's view. And yet Wales's 'opt-out plus bother the family' system is being sold as a nudge.

Now, a few folks, a few years ago, were just a bit worried that the policy application of Sunstein and Thaler's insights would be rather more hamfisted and that opening up this whole nudge project would yield a pile of things that Thaler would view as shoves. Thaler dismissed those worries as variety of bathmophobia: the fear of slopes of the slippery kind.

But it isn't just the politicos who get things wrong. Here's how the research team working on the international nudge comparison project sees things:

Beyond organ donation, we can now find nudge-type policies in a range of policy areas. The default setting has been changed on company pension schemes in the UK so now it is assumed that employees want to enrol. There are also new plans to change the default setting for domestic access to internet pornography, with households having to opt in to getting access to such sites.

It's always worth keeping half an eye out for how one's bright ideas might be mangled in policy application. Whitehead et al, the research team funded by the Economic and Social Research Council to run the international comparison of nudge policies, have a few insights. While definitely counting the porn filter as a nudge, they also have a worry:

What is most concerning is that I don’t hear any researchers offering alternative viewpoints on the political value of the Nudge theory. Rather, they seem busy trying to get onto the advisory boards of various Behaviour Change research networks, centres and institutes – perhaps in order to fulfil their duties to serve policy-makers in their research and to secure research ‘impact’ – now a pre-requisite of almost any research funding in an increasingly competitive funding environment.

They perhaps could read the Cato Unbound symposium on Nudge - the one where Thaler dismissed his critics' fears as paranoid - for a few alternative viewpoints on the political value of Nudge theory.

Bathmophobia

Richard Thaler had a term for people with an irrational fear of slippery slopes: bathmophobes. He counted Glen Whitman among their ranks for warning that Thaler's "nudge" architecture could would up proving rather illiberal in practice. I worried, in my Mont Pelerin address, that by reducing the costs of paternalism, Nudge seemed more likely to expand the range of paternalism rather than transform existing paternalisms into softer alternatives. Paternalism gets cheaper so we get more of it. I suppose I'd have been a bathmophobe as well.

Anyway, here's Thaler on the bathmophobes:

For example, you may not be familiar with bathmophobia, which is an abnormal and persistent fear of stairs or steep slopes, or a fear of falling. Less well known is “nudgephobia,” also known as the Whitman-Rizzo syndrome, which is the fear of being gently nudged down a slope while standing on a completely flat surface. This phobia is sometimes associated with other disorders such as the fear of being given helpful directions when lost; the fear of obtaining reliable medical advice when sick; and, in rare cases, some have even suffered from a fear of having someone recommend a book or movie that you will really like.

...Another basic point that Whitman does not recognize is that paternalism of some sort is inevitable. Consider the following common problem. Most firms have an open enrollment period in November when employees can elect their benefit package for the following year. At my employer, the University of Chicago, you have a few weeks to log on to the appropriate web site and make your selections. The question is, what should the employer do for those employees who forget to log on? (Professors’ reputations for absent-mindedness are well deserved.) For each of the choices the employee has, the employer needs to select a default option for those who do not log on, and normally the default is either “same choice as last year” or “back to zero” (meaning, decline this option). At Chicago the default option for the health insurance plan is the same as last year.

...Presumably, if libertarian paternalism creates a slope risk then real paternalism must generate a “cliff” risk. But have we seen this in history? In America we started as Puritans but moved away from it. When Prohibition was passed into law it did not lead to a slew of other paternalistic interventions. On the contrary, once society got to see prohibition in action, the law was eventually repealed. Is there any evidence of a paternalistic slide? The only example Whitman gives is smoking, where there certainly has been a progression of increasingly intrusive laws passed. But there are several problems with this example. First, most of the anti-smoking laws are based on externalities, not paternalism. People do not want to fly, eat, or work in smoke-filled environments. Indeed, many smokers favor such laws. Note that while smoking bans are not nudges, they are shoves, even these shoves do not seem to have led to a batch of similar crackdowns in other domains. I have not seen any municipality institute a ban on loud talking in restaurants, for example, though come to think of it… .

In short, the risk of the slippery slope appears to be a figment of Professor Whitman’s imagination, and clear evidence of his bathmophobia. 

Remember that old Simpsons episode where Lisa convinces an amnesiac Burns about the merits of recycling? And he goes on to recycle the ocean into Little Lisa Slurry? And Lisa recoils in horror at the evil she helped enable?

I wonder if that's how Richard Thaler's feeling now. Perhaps he should be. Why? This.

I suppose it's all fine. After all, there has to be some default position on whether you wish to have a censored internet package. The choice of default "porn and dangerous thoughts allowed" will have consequences, as will the alternative of "porn and dangerous thoughts not allowed, unless you tell your ISP that you like porn and dangerous thoughts and maybe get put on some list because of it". The government cannot help but to influence outcomes by its choice of the default position. So why not ban dangerous thoughts by default. It's still Libertarian Paternalistic, because you can still opt out. And really, why would anybody need to have access to websites including "violent material", "extremist and terrorist related content", "anorexia and eating disorder websites", "suicide related websites", or websites mentioning alcohol and smoking. We know those are all bad things; the government tells us so. Switching the default is a perfect Thaler-inspired nudge.

And it's not just me calling this a nudge policy.

The Independent notes the filters implemented by the four main private internet providers will be "default-on," meaning users must explicitly choose to turn them off. Users can decide to keep certain filters while turning others off.

Making the filters default means most people will keep them, according to Open Rights Group Executive Director Jim Killock. "We know that people stick with defaults: this is part of the idea behind 'nudge theory' and 'choice architecture' that is popular with Cameron."

According to Cameron, the new parental control settings will be turned on for all new broadband subscribers "by the end of the year."

If anything, I've been inadequately bathmophobic. Here's what I wrote about this exact policy back in 2010 when it first came up:

I'm going to bet that this doesn't wind up being implemented. Here's Hansard of the debate. The Minister seemed pretty lukewarm on pushing through regulatory changes; I'll guess that the latest reports are bargaining position for either getting ISPs to do more to push subsidized Net Nanny variants to folks who want them, or for concessions on other issues altogether. Dick Puddlecote is livid (rightly so) but I'd be shorting the iPredict contract at prices higher than $0.35. It's pretty disgusting that a coalition that includes the Lib Dems would be even making noises in this direction.

I was wrong.

Since we're into the range of policies-I'd-previously-thought-implausible, let's turn back to my review of Nudge in the Christchurch Press a few years ago, in which I wondered whether Sunstein and Thaler would be happy with choice architecture at the ballot box.

While Sunstein worries about our decisions over investment plans or our weakness of will at the buffet table, I worry about our decisions at the voting booth. We vote infrequently, there’s no feedback from our personal voting decision to any policy outcome (unless you happen to hit Lotto by breaking a tie), the voting decision is complex and we may have little grasp of the issues at stake let alone our own positions on those issues. In my own research, I’ve found that only about half of voters in 2005 could place National, United Future, and Labour correctly on a left-right spectrum, for example, and that individuals’ political knowledge independently affects their policy and party preferences even after controlling for income, education, race, employment, gender, and other demographic characteristics. And so I think we (by which I mean you) need a nudge. Under my libertarian paternalistic voting system, your electoral enrolment would be linked to your census details. You’d then answer a brief questionnaire when entering a computerized voting booth, and I’d tell you, through the computer’s algorithms, for whom you should vote. Trust me: I’d be choosing the option that really would be best for you, if you only understood all of the policies supported by each of the parties and had a PhD economist’s understanding of the likely effects of these policies. You’d still be free to pick some other candidate or party, but you’d have to first reject the default choice I’d pick for you. The remaining options would then be presented in an order designed to maximize the chances of your choosing the next best option.

I trust that you find this kind of scheme repugnant. I’d find it great, so long as I got to be the choice architect.

I'd given this as reductio; I wonder whether Cameron mightn't be thinking about implementing it.

Ideas have consequences.

Update: James, in comments, notes that part of this is already up for mobile broadband:

This filter is already in effect in the UK for all "mobile broadband". It's called "content lock" - and about e.g half Lindsay Mitchell's blogroll is classified as adult content by the UK's current filter (Offsetting Behaviour is currently OK).
How do you unlock it - easy. Go to a website and enter your details. All you need is a credit card. A UK credit card. With a UK Postcode. Which, of course, I don't have.

I'm glad that Offsetting isn't on Cameron's banned list as yet.

Previously:

• UK Nudges
• Libertarian Paternalism Is An Oxymoron
• From Nudge to Shove
• Nudge Nudge
• Nudge thyself
• Wink Wink, nudge nudge, say no more (in which this porn nudge was first discussed)

Healthist fantasizing

I'd put low(ish) odds on these fantasies coming true. But that they're getting airtime in the New England Journal of Medicine is a tad worrying [HT: Chris Snowdon]. Mello and Cohen there argue that the Supreme Court decision in ACA gives the federal government more scope for achieving public health objectives through the tax system, and that this is a good thing.

The federal government has long used taxes to achieve public health goals, but in fairly limited ways. Taxes and tax penalties for individuals have generally been confined to products that cause health harms and associated social costs, such as tobacco, alcohol, firearms, and pollutants. Taxing of activities is rarer and confined to economic transactions; most recently, the ACA imposed a 10% tax on tanning-salon services. Broader use has been made of tax penalties and incentives to influence corporations to refrain from activities that threaten health, such as environmental contamination, or to engage in health-promoting activities such as subsidizing health insurance and wellness programs.

Roberts's opinion appears to invite more targeted, assertive interventions to promote public health. For example, instead of merely taxing tobacco sales, the federal government could require individuals to pay a tax penalty unless they declare that they haven't used tobacco products during the year. It could give a tax credit to people who submit documentation that their body-mass index is in the normal range or has decreased during the year or to diabetic persons who document that their glycated hemoglobin levels are controlled. It could tax individuals who fail to purchase gym memberships. It could require taxpayers to complete an annual health improvement plan with their physician in order to obtain a tax credit, though that might be challenged under other parts of the Constitution. These strategies depart from traditional uses of taxes by targeting omissions and noncommercial activities that are important drivers of chronic disease.

State and local governments, too, can pursue such strategies. Levying taxes to achieve regulatory aims — even taxes resembling mandates with penalties — is well within their police-power authority. They've wielded this power to impose various “sin” taxes on unhealthful products, as well as in more innovative ways, such as the insurance mandate with an SRP that Massachusetts pioneered. The Court ruling makes clear that the federal government can enter territory historically dominated by the states.

Sin taxes are unbounded in domain when anything that's less than perfectly healthy is a sin. So far so awful. But this next paragraph... egads.

Taxes are an appealing mechanism of public health regulation for several reasons. They proffer “nudges” and market-based solutions as alternatives to rigid mandates. Tax-based policies like the SRP retain an element of voluntariness, especially since lawmakers can calibrate the tax penalty to the importance of the desired behavior change. There's strong evidence that taxes affect consumption decisions. Finally, tax strategies are “win–win” for governments, either leading people to take health-enhancing steps or collecting revenue to fund health or other programs.

I hope that Richard Thaler goes and smacks these guys around. This isn't a nudge, it's a shove. Much ill is advocated in Thaler's name. Constrained to the exact mechanism that Thaler laid out, his libertarian paternalism recommendation can hardly be faulted. But it was never, ever, ever going to be constrained to that range. Thaler himself has never been clear enough on the line between a nudge and a shove.

As always, the healthists see the main obstacle as being the powerful moneyed interests:

Yet even when proposed taxes make sense, they can be soundly defeated. Although tax credits, exemptions, and deductions tend to be well received, new taxes and penalties do not. Strong industry opposition is a formidable obstacle even when public sentiment isn't. Aggressive lobbying by the beverage industry, for example, defeated a soft-drink tax proposed for inclusion in the ACA, and a blitzkrieg by the tobacco industry sank California's Proposition 29, which would have hiked cigarette taxes by $1.00 a pack, with revenues allocated for cancer research. States, however, have sometimes had remarkable success in enacting new taxes; for example, New York passed a $1.60-per-pack increase in its cigarette tax in 2010, bringing the total state tax to $4.35 per pack, and 47 states have collectively increased their cigarette-tax rates more than 100 times in the past decade.4

And, finally, the beast that slouches towards Washington to be born:

Although no constitutional barriers block expanded federal use of tax-based strategies, political obstacles remain. Some interventions we've outlined would never survive the political process, given prevailing antitax sentiment. But such sentiment may fade as the economy recovers or become less important if Democrats regain control of the House of Representatives. Moreover, the Court decision affirms that Congress can facilitate passage of a tax by calling it something less controversial. The Court has highlighted an opportunity for passing creative new public health laws, authorized by the taxing power; this opportunity now awaits its political moment. [emphasis added]

My odds-on bet for the path that leads to the political moment:

1. More reports come out on the costs of unhealthy behaviours, either to the government directly via the public health system, or to the public via insurance mandates that insurers cannot fully internalise the costs of individual health-related decisions via actuarially fair premiums.
• A bunch of these are highly inflated by including costs totally internal to the individual, but journalistic accounts never ever ever parse out the costs to the public versus costs to the individual; they're all "social costs" by virtue of assuming that unhealthy decisions can never be rational.
2. Change in framing: it's not individual choice, it's internalising the costs that unhealthy decisions impose on others.
3. Properly nudge-style policies will fail to make enough headway against the purported costs. Harder nudges then are needed, the grounds for intervention already having been conceded. 
4. Tax measures then are proposed to internalise the externality, even though the purported externality is mostly, well, not an externality of any kind. These get described as nudges as well (see NEJM, above). 

That's the path we've been seeing here in New Zealand and Australia around alcohol and tobacco. 

From nudge to shove

David Friedman reminds me about his great post from 2009. I particularly liked his closing paragraph:

An optional charge where the default choice is to pay it is the sort of thing Sunstein and Thaler propose, a nudge in the direction of doing what those responsible believe, possibly correctly, that most of those nudged would want to do if they took the time to think about it. But the people constructing the choice architecture know what result they want to get, they believe they are doing good and so not constrained by what they themselves would consider proper principles of morality and honesty in a commercial context, so it is very easy to make the "wrong" choice more and more difficult and obscure until what is optional in theory becomes mandatory in practice.

Add in ambiguity about what's good enough as opt-out provision and nudge seems likely to drift quickly to shoves.

Cornell's Brian Wansink and David Just worry that the large soda ban won't just be ineffective:

We've dedicated our research careers to helping people eat better, contributing to Smarter School Lunchrooms, 100-calorie packs, and the 2010 Dietary Guidelines. We fear that this ban on large soft drinks will be a huge setback to fighting obesity for two reasons: 1) unless it succeeds, it will poison the water for better solutions, and 2) it won't succeed.

First, consider the McLean Effect. McDonald's launches the visible and controversial low-calorie hamburger. It failed, becoming a byword for restaurants for the next 15 years. No one would dare introduce low-calorie fast-food offerings because "Look what happened to the McLean."

Banning larger sizes is a visible and controversial idea. If it fails, no one will trust that the next big—and perhaps better—idea will work because "Look what happened in New York City." It poisons the water for ideas that may have more potential.

This might be the case in New York, where this ban is looking particularly unpopular. For popular but ineffective bans, I worry we instead make more heavy-handed regulation more likely when the softer touch fails. Adam Ozimeck asks* current paternalists what measures they'd deem too draconian if implemented sometime down the line; if we look at the slippery slope in tobacco regulation, it's the right question to ask. Just don't expect the goalpoasts to stay put.

*  Look for the post "A Challenge for Paternalists", 5 June.

Paternalism - for children, and for the lower orders

Will Wilkinson's excellent post at The Economist highlights the less-than-hidden classist underpinnings of New York's soda ban.

GIGANTIC sugared soft drinks are disgusting. Let's just get that out of the way. Can we also agree that the high-calorie drinks rich people like to consume—red wine, artisanal beer, caramel frappuccinos, mango smoothies with wheatgrass and a protein boost—aren't at all disgusting? At any rate, we yuppie pinot-drinkers know how to look after ourselves. In contrast, the wretched classless hordes, many of them being of dubious heritage, lack the refinement of taste necessary to make autonomy unobjectionable. Those who abuse their liberty, filling the sidewalks of our great cities with repulsive shuffling blimps, can't expect to keep it, can they? 

But should we really be surprised that paternalistic regulation would be so-targeted? When I work backwards from the set of paternalistic regulations to the most plausible underlying motives, I still wind up with the conclusion I'd reached a year ago:

The behaviours of the lower orders disgust me [the regulator]. They give in to base animalistic sensory pleasures. We need to fix them. Tax and regulate them until they stop being noticeably annoying. We'll say it's for their own good, but we'll really stick to the kinds of things that annoy us. So things like making sure everyone in low decile schools takes a course in basic personal finance so they understand how hire-purchase works and avoid making mistakes with loans, we'll not worry about that. But we'll tax fatty foods because obese people are unpleasant to look at and we'll tax the kinds of booze that the lower orders drink because few things are more unpleasant than poor drunk idiots.

It's not implausible that poorer cohorts are more in need of paternalistic regulation than higher income cohorts, if only because of differences in intelligence across cohorts. Do flip back to the linked post and consider the stylized facts there presented:

• The kinds of alcohol that poor people like get taxed far more heavily relative to overall price than do the kinds of alcohol that rich people like. That isn't unreasonable where the external costs of alcohol use are proportionate to the pure alcohol consumed, but when we start going for minimum price regulation and specific taxes on RTDs, it looks an awful lot more targeted.
• Official government agencies ignore the evidence on the J-curve and instead promote an abstinence only line. The only sense I can make of this is the noble lie: dumb people who'd otherwise be tempted to drink too much if they drink at all shouldn't drink; smart people can see through the official line.
• The war on drugs is more heavily enforced against poor people than against rich people.
• "Fat taxes" would disproportionately hit the poor. The tax will be a greater portion of the purchase price of hamburger meat compared to scotch fillet, even if the fat proportions are identical. And, the higher the proportion of ingredient cost in total price (as opposed to say the input of a high quality chef), the greater will be the the proportionate burden of an ingredient tax. Any bets on whether the price of a McDonald's burger goes up by more, percentage-wise, than a Ruth's Chris steak if we put in a fat tax?
• If the point of an "internality" tax like a fat tax is to force the individual to weigh the health costs to himself when purchasing, we'd need to scale those taxes by income if we think that rich people respond less to a small per unit increase in food prices than do poor people but suffer from similar behavioural anomalies; if we think that smart rich people are already weighing up those costs and compensating with increased exercise, then it doesn't matter that the per unit charge has less effect on the that group.
• There's all kinds of talk of mandating that fast food restaurants prominently display nutritional information and calorie counts. But folks tend to overestimate calorie counts at fast food places and underestimate them at the fancier restaurants where rich people eat. Because everybody expects fast food to have lots of calories.
• Finally, high IQ folks may be better able to route around whatever regulations are put in place.

It still looks to me as though paternalistic regulation is generally targeted at annoying behaviours exhibited by poor people, with sufficient route-arounds to keep the regulations from being too annoying for higher income cohorts. Bloomberg's soda restrictions were just a bit more blatant than most. Again, pulling from last year's post:

One of the better critiques of policy prescriptions based on behavioural economics is that it requires the modeller to step out of the system and to assume that he and the regulator who implements his policies are less subject to the problems ascribed to the regulation's subjects. Public choice folks worry that the paternalistic regulators suffer from the same behavioural foibles as everyone else but have worse incentives than do individuals who have to suffer the consequences of their own decisions. But if the implicit model is that all of this behavioural stuff really only applies to those people over there - poor dumb people, then there's good reason to keep the modeller out of the system.

Recall that Berggren found very few articles in behavioural economics advancing policy prescriptions consider the possibility that regulators might also be subject to behavioural anomalies; I think it's because of a general assumption that they do in fact sit above those they're regulating.

Libertarian paternalism is an oxymoron

Remember those Sci-Fi movies from the '50s where the mad scientist, who only had the good of the world at heart and proceeded with his experiments despite much warning, winds up on his knees crying out to the sky "It wasn't supposed to be like this! This isn't what I wanted!"

Here's Richard Thaler on Mayor Bloomberg's ban on soda:

To state the obvious: a BAN is not a NUDGE.The opposite in fact. So don't blame Bloomberg's ban on large soda cups on us.
— Richard H Thaler (@R_Thaler) May 31, 2012

To which Justin Wolfers replied:

.@R_Thaler Disagree. Bloomberg's not banning Soda. Indeed, the big cup still exists--it's two little ones. So this IS really a nudge.
— Justin Wolfers (@justinwolfers) May 31, 2012

There isn't much distance from nudge to shove, especially when preference heterogeneity keeps nudgers from recognizing when they're shoving. Justin doesn't see it as too costly, likely because he isn't a soda-fan either. So how could it be costly? A religious nudger could similarly see it as pretty costless to encourage at-home parenting by banning having a nanny employed more than 3 days a week; a parent could always opt-out by hiring a second nanny.

Should we blame Thaler? Here's what he had to say two years ago when pressed on whether his libertarian paternalism wouldn't lead to bans and harder paternalism:

In short, the risk of the slippery slope appears to be a figment of Professor Whitman’s imagination, and clear evidence of his bathmophobia. To be fair to him, this phobia is hardly unique to him and Professor Rizzo. Slope-mongering is a well-worn political tool used by all sides in the political debate to debunk any idea they oppose.
...
Instead of slope-mongering we should evaluate proposals on their merits. (We devote a chapter of Nudge to an evaluation of the choice architecture used in Sweden’s social security experience.) Helping people make better choices, as judged by themselves, is really not a controversial goal, is it?

For all the protests that "nudge" was supposed to have strong opt-out provisions, it was awfully predictable that it wouldn't turn out that way in practice. I don't know how much time Thaler spent  working to ensure choice was preserved in his proposed choice-preserving architecture, but he did spend a bit of time telling libertarians that this sort of thing couldn't happen.

I still like my old review of Nudge, in which I proposed some nudges at the ballot-box:

While Sunstein worries about our decisions over investment plans or our weakness of will at the buffet table, I worry about our decisions at the voting booth. We vote infrequently, there’s no feedback from our personal voting decision to any policy outcome (unless you happen to hit Lotto by breaking a tie), the voting decision is complex and we may have little grasp of the issues at stake let alone our own positions on those issues. In my own research, I’ve found that only about half of voters in 2005 could place National, United Future, and Labour correctly on a left-right spectrum, for example, and that individuals’ political knowledge independently affects their policy and party preferences even after controlling for income, education, race, employment, gender, and other demographic characteristics. And so I think we (by which I mean you) need a nudge. Under my libertarian paternalistic voting system, your electoral enrolment would be linked to your census details. You’d then answer a brief questionnaire when entering a computerized voting booth, and I’d tell you, through the computer’s algorithms, for whom you should vote. Trust me: I’d be choosing the option that really would be best for you, if you only understood all of the policies supported by each of the parties and had a PhD economist’s understanding of the likely effects of these policies. You’d still be free to pick some other candidate or party, but you’d have to first reject the default choice I’d pick for you. The remaining options would then be presented in an order designed to maximize the chances of your choosing the next best option.

I trust that you find this kind of scheme repugnant. I’d find it great, so long as I got to be the choice architect. But opinions surely would vary, and I’d surely oppose the scheme if anyone other than me got to be the architect. The problem is that most of the arguments against my scheme cut similarly against Sunstein’s. More worrying, Sunstein seems pretty happy to blur the line between nudges and shoves: increasing cigarette taxes to discourage smoking is surely paternalistic, but is a bit stronger than a nudge. And, honestly, even the choice preserving nudges, like cars that nag you about the petrol you could save by easing up on the pedal, sound thoroughly unpleasant: I’d be nudged into learning enough automotive electronics to cut the right wires.

Update: It's occurred to me that I can't assume that everybody in the world has read the brilliant piece that started all this: Sunstein and Thaler's "Libertarian Paternalism Is Not An Oxymoron". Restricting it to choice of defaults, it's pretty tough to fault their argument. Except it never gets restricted to choice of defaults, now, does it?

A reasonable nudge

I've two main worries about nudges. They're often a fair bit more coercive than the word "nudge" suggests; and, if they fail to yield the planners' desired outcomes, they may only be harbingers of more forceful interventions.

But this one seems exceptionally mild: drivers in the UK are required to tick either Yes or No in the box indicating whether they'd agree to be organ donors when getting their drivers' licences renewed. The story says similar moves in Illinois did wonders for donor enrolment.

I don't think a similar move in New Zealand would do much absent legislative changes requiring that organ transplant units deem licence enrolment constitute informed consent. From the NZTA FAQ:

Your driver licence is not informed consent

If you've indicated on your driver licence that you wish to be a donor, this does not count as 'informed consent' for your organs and tissues to be retrieved for transplant purposes in the event of your death.

If a person gives 'informed consent', this means that they have enough information to fully understand what they agree to, and that their agreement is given willingly. It's very difficult to prove the circumstances or level of knowledge a person had at the time of making their licence application.

Discuss your decision with your family

Ticking the 'Yes' box on your driver licence form only means that you have indicated your wish to be identified as an organ and tissue donor. It does not automatically mean that your organs or tissues will be donated in the event of your death. In practice, your family will always be asked for their agreement to organ and tissue donation.

If your family knows what your wishes are in regard to donation, they will be more likely to follow them through in the event of your death. Having your wishes displayed on your driver licence is just one way of making them known to your family. You should also discuss your decision with them.

If you would like to donate certain organs or tissues but not others, make sure that you discuss this with your family, too.

A "No" effectively counts as informed consent; a "Yes" doesn't. Great system.

Shifting the goalposts

First they said that fast food was bad because people underestimated the calories in it and so were deceived. Imperfect information meant market failure. Penn & Teller showed that was wrong; so too has Dan Ariely. And, worse, Ariely notes that when folks were presented with the accurate calorie count, they sometimes ate more as they'd previously overestimated things.

Me, I'd then say that there's no market failure and folks ought to be left to make their own choices. I'd have been pretty skeptical about market failure based on imperfect or asymmetric information in the first place as calorie information isn't hard to come by for folks who want it, but these findings show that, even if you thought there was a potential market failure of this sort, it didn't hold in the real world.

But it turns out that giving people accurate information and letting them make informed choices wasn't really the goal. Instead, it's back to the drawing board to find new ways to encourage people to reduce food intake.

Ariely says Duke University also conducted a similar study. He says they posted caloric labels at "the Duke version of Panda Express," a fast-food version of Chinese food. And they saw "absolutely no difference" in caloric consumption.

But then they took it a step further and said: "What else could we do? What other inventions?"

They decided to give people an option of receiving less of the main dish — for example, the orange chicken. People said, "No," according to Ariely. So then they asked people if they wanted less of the side dish. They asked people, "What about we give you half a portion of fries — that would save you 250 calories. Are you interested in that?" Ariely says that more than 40 percent of the people said, "Yes."

"What happened in eating is that no matter how much people give you to eat, you'll eat the whole thing," Ariely says. "So it's really a question of how much you start with. Because we've also tested this — we looked at what people end up with and how much they throw away. People eat everything you give them. But if you give people a mechanism to limit what they're going to have for food later on, people actually eat less as a consequence."

Ariely concludes that offering a smaller portion of the "secondary event" is more successful than trying to reduce the "main event."

"It cuts calories and lets people execute something that's good for them," he says.

But Ariely noticed something surprising. When they stopped the promotion and studied what happened the next day, they found that people did not keep asking for it. They did not say, "Hey, I was here yesterday, they offered me a half a portion of fries, can I do it again?"

"When you offer it [to] people, they understand it's a good offer and they cut down on the calories," Ariely says. "But when you don't offer it to people, they're not doing it for their own self. So we have to think about not just what information we give to people, but how we get them to think about different paths of saving caloric consumption."

Or, maybe the experimented with the new option, found they were still hungry, and wanted the larger portions.

Clearly it's time that New York City implemented a regulation mandating the offering of half-sized portions. Who knows. It might work. And the costs are only born by restaurants rather than by the city or state during times of fiscal restraint.

Overcoming the tyranny of choice

Do too many brands and too many choices on store shelves really make customers unhappy? Sounds like a profit opportunity for somebody to run a store offering fewer choices with more editorial discretion on which products make the cut. I wonder who could do that...aha.

Swapping selection for value turns out not to be much of a tradeoff. Customers may think they want variety, but in reality too many options can lead to shopping paralysis. "People are worried they'll regret the choice they made," says Barry Schwartz, a Swarthmore professor and author of The Paradox of Choice. "People don't want to feel they made a mistake." Studies have found that buyers enjoy purchases more if they know the pool of options isn't quite so large. Trader Joe's organic creamy unsalted peanut butter will be more satisfying if there are only nine other peanut butters a shopper might have purchased instead of 39. Having a wide selection may help get customers in the store, but it won't increase the chances they'll buy. (It also explains why so often people are on their cellphones at the supermarket asking their significant other which detergent to get.) "It takes them out of the purchasing process and puts them into a decision-making process," explains Stew Leonard Jr., CEO of grocer Stew Leonard's, which also subscribes to the "less is more" mantra.

Trader Joe's spends a lot then on figuring out the best few items to stock.

But what about all those other pesky choices where you can't control your impulses? Oh, if only I could stop wasting time on the web, texting while driving, spending too much.... Ah.

Dan Nainan can’t trust himself to work at his computer without clicking on distractions, so he uses an Internet-blocking program to shut down his Web access twice a day.

“I’m sorry, but try as I might, I could never, ever do this on my own,” said the New York City comedian who’s struggling to finish a book. “I wish I could, but I just don’t have the discipline.”

Nainan’s system of two, two-hour blocks is one example of how Americans are trying to control their impulses using technology that steps in to enforce good behavior.

With the new year days away, many tools are now available to help people stay in line, including a GPS-enabled app that locks down texting once a car gets rolling and a program that cuts off credit-card spending. Another device monitors your workout and offers real-time voice feedback.

Have we entered an era in which electronics serve as mother, cop and coach because we can’t manage our own desires?

Yep, said Ann Mack, a trend-watcher for JWT Intelligence, an arm of the marketing giant. She named “outsourcing self-control” and “de-teching” as two top trends for the new year.

Markets interpret deadweight losses as profit opportunities, with entrepreneurs routing around the inefficiency. In the world outside the blackboard.

Update: And via @acoyne, an ignition interlock app for your phone to stop drunken posting to social networks.

Mobile developer Imperial Penguin is announcing the release of Social Interlock 1.0, a new app for iOS and Android devices that is designed to make the morning after a heavy night of drinking just a little less stressful. When you replace the official Facebook, Myspace, and Twitter apps on your phone with this app, you can lock yourself out if the app determines that you are too intoxicated to post your status and/or message your friends responsibly.

The app works by requiring the user to take a simple motor skills test when they are sober. After the sober test is taken, the user can lock the app to prevent themselves from accessing the three supported social networks. In order to unlock the app, and gain access, the motor skills test must be taken again and a score of near the sober amount must be earned. The difficulty of passing the test can be adjusted in the options, so each user can adjust the app for their specific tolerances.

It costs $0.99.

Wink wink, nudge nudge, say no more

You've always had the option to opt out of internet pornography. Lots of internet service providers advertise provision of specifically filtered services to keep porn out. Some ISPs provide nothing but filtered service. But you have to opt out: the default plans don't censor your pipe.

So most folks don't opt out unless they want to bind themselves against self-control problems, they want to keep the kids out of that stuff, or they want to make a symbolic statement against pornography and in favour of the ISPs that provide filtered service.

Some Brit MPs wish to reverse the default:

The biggest broadband providers, including BT, Virgin Media and TalkTalk, are being called to a meeting next month by Ed Vaizey, the communications minister, and will be asked to change how pornography gets into homes.
Instead of using parental controls to stop access to pornography - so-called "opting out" - the tap will be turned off at source. Adults will then have to "opt in."

...

Claire Perry, the Tory MP for Devizes and a keen lobbyist for more restrictions, said: "Unless we show leadership, the internet industry is not going to self-regulate. The minister has said he will get the ISPs together and say, 'Either you clean out your stables or we are going to do it for you'."

"There is this very uneasy sense for parents of children that we do not have to tolerate this Wild West approach. We are not coming at this from an anti-porn perspective. We just want to make sure our children aren't stumbling across things we don't want them to see."

More wonderful libertarian "nudge" paternalism from the Brits. Those who enjoy the stuff would still get it, but only if they explicitly sign up for it and presumably get put onto some government list of known pornography viewers which will presumably get out via Wikileaks within a few years. Then the journos could have fun looking at the lists of which prominent people have signed up for the uncensored stream and folks can snicker about their neighbours' viewing habits.

The big difference between the two default rules is that the opt out rules allow folks with "deviant" tastes to pool with those who are indifferent, while opt-in only selects those whose preference intensity is strong enough to be happy about being on the list. Nothing is currently signaled by failure to opt out but opting-in would say rather a lot: you're either a consumer of the product, or a very strong civil libertarian.

I'm going to bet that this doesn't wind up being implemented. Here's Hansard of the debate. The Minister seemed pretty lukewarm on pushing through regulatory changes; I'll guess that the latest reports are bargaining position for either getting ISPs to do more to push subsidized Net Nanny variants to folks who want them, or for concessions on other issues altogether. Dick Puddlecote is livid (rightly so) but I'd be shorting the iPredict contract at prices higher than $0.35. It's pretty disgusting that a coalition that includes the Lib Dems would be even making noises in this direction.

UK Nudges

I've been pretty critical of Sunstein and Thaler's "Nudge" programme of libertarian paternalism. The emphasis seems to be pretty heavily on the latter. In theory, we could imagine replacing a lot of existing paternalistic regulations with nudge-style interventions that would reduce the total amount of coercion; however, it's seemed rather more likely that nudges would be added on to the existing set of regulations to increase the scope of paternalism rather than to make existing paternalism less onerous. Richard Thaler's objected that this isn't the point of libertarian paternalism:

The point of libertarian paternalism is precisely to devise policies that help but don’t intrude. I don’t like most pure paternalism either. But I really feel that the best way to fend off pure paternalism is by utilizing nudges instead of shoves, and by insisting that we keep the nudges as gentle as possible. Can any true libertarian really disagree?

But let's see how the UK Cabinet Office's Nudge Unit is implementing Thaler's advice.

The application of behavioural economics does not imply a paradigm shift in policy-making. It certainly does not mean giving up on conventional policy tools such as regulation, price signals and better information. Sophisticated behavioural programmes to reduce smoking or excess drinking don‟t imply giving up on taxes on cigarettes and alcohol. Similarly, programmes to persuade us to eat five portions of fruits or vegetables a day mean still have to address practical barriers such as how the lack of supply of fresh food in poorer neighbourhoods.

Nudges are complements to standard paternalistic regulation, not substitutes for it. The total amount of paternalism increases.

The document above-linked makes few policy recommendations other than that nudge approaches be considered as part of the policymaker's toolkit. But here are some of their general suggestions.

• Use social norms to convey examples of desired behaviours: "Most people do X" as information campaigns
• If taxes aren't normally incorporated into the sticker price on the shelf, start adding them into the sticker price of bad things so they'll appear to be pricier (alcohol).
• Affect matters, so aim for emotional responses to interventions.
• People desire positive self-image; link negative self-image to targeted behaviours (smoking causes impotence, etc)
• Because some may not approve of government pushing folks towards desired behaviours, use public campaigns with messengers "that are not seen as agents of the state": peer to peer programmes, non-government organizations
• Encourage "opt out" contributions as part of prices to help fund public projects. Examples given are Washington State's default $5 addition to drivers' licence fees for state parks. "This has implications for policy-makers either concerned with raising revenues in a non-compulsory manner, or with more nuanced ways of regulating and adjusting for market failures."
• Priming folks with songs with "pro-social" lyrics increases altruistic behaviour, but "more research evidence is needed before such interventions could be recommended". I'd hate to guess where they'd wind up going with this. Reduced spectrum licence fees for radio stations playing a quota of pro-social music?
• Social marketing drawing on affect to encourage blood donation and community volunteering
• Bottle deposit schemes use loss aversion to encourage recycling; make them mandatory.
• Train kids in schools to provide health information to parents and grandparents.
• Evidence that interventions affecting individual behaviour, like workplace smoking bans, may indirectly affect their peer group's behaviour and consequently "may increase the legitimacy of policies that are used to target other unhealthy behaviours."
• "Where confusion exists in pricing structures, it may be necessary to require companies to present their prices in structured formats that allow consumers to make the choice that is best for them."
• They note, without recommendation, that among the factors that prime folks for excessive drinking are container size. Presumably this would lead to measures making the half-pint the standard default unit rather than the pint.
• Mood can affect choices; decisions made in "hot" states may be regretted, so "it may be useful to have a formal 'cooling off' period that allows us to come back and reconsider our decision at a later date"; insurance and personal loans are given as example.
• Mechanisms requiring casinos, including those online operating out of the UK, to exclude problem gamblers who've signed onto self-exclusion agreements. (recall that Julia Gillard has done this one worse in Australia)
• Default opt-out private pension contributions.

They note that getting public approval for some of their proposals might be difficult; they recommend deliberative forums where citizen juries get to hear evidence and discuss issues, with results of those forums helping to build legitimacy for proposed policies. I wonder whether they've here hoping to exploit Cass Sunstein's work finding a strong severity shift in jury deliberations.

If the event has such legitimacy, then it could be seen that some personal responsibility has been preserved because people have been able to make a considered and informed decision to allow government to change their behaviour.

Nice. Libertarian paternalism has shifted from opt-out to "if we have a forum, it's ok".

As example of judging whether an intervention might be controversial, they suggest a potential policy of "acceptable eating contracts", where the obese would sign contracts mandating certain eating behaviours; they suggest this would be less controversial than policies using priming to achieve similar ends. The Acceptable Behaviour Contracts with which they're compared are given as alternative to prosecution for low-level offending; I'm not sure whether Acceptable Eating Contracts would be entirely voluntary or "nudge" voluntary, where the NHS doctor says you'll be sent to fat camp in the alternative (but it's still your choice).

I wonder how long it'll be until the Ludovico Technique is recommended as Nudge-based policy as alternative to worse things for folks whose preferences don't conform to those of the nudgers.

HT: John Humphries and Joseph Clark.