The Economics of Fast Food
How people hurt themselves
in their own self-interest
The classical free market economics story runs like this:
Premise A: People only act in their self-interest.
Premise B: People often eat fast food.
Therefore: Fast food is often in people's self-interest.
And there are situations when fast food is in a person's self-interest. But eating it daily for lunch is not one of them. Nor is continuing to eat it after it has contributed to a person's obesity. But still people eat it. And eat it. And eat it. Why?
The answer, I believe, can be summarized in a single-word revision to Premise A above: "People only act in their own felt self-interest." The implication is clear - people are sometimes wrong about what is good for them.
A reasonable assessment of the decision to eat or not eat fast food at any given time might look something like this.
Pros: It's cheap, it's fast, it tastes good, it fills you up.
Cons: It lacks many key nutrients, it causes a dangerous glycemic response, it leads to obesity and it's associated illnesses, it increases the risk of diabetes, it leads to inflated costs in the healthcare system, it contributes to the homogenization of the food industry.
Looking at this list, you might again question why people eat fast food at all. I'll offer two reasons.
First, this list only includes conscious, rational decision points, while subconscious, extra-rational decision factors are also at play. In this case, two subconscious factors weight heavily on the positive side.
Second, the Pros in the list are immediate, meaning that if I decide to eat fast food I quickly experience each of the pros - the cheapness, the quickness, the taste, the fullness - while the cons are not immediate. I don't feel the lack of nutrients right away, I don't even know what the glycemic response does feel like, and all the other ones either won't affect me for a while, or contribute to some larger problem that one meal can hardly affect one way or the other.
Our brains are not geared for long-term thinking. As best I can see it, on average we can consider about one year in advance, and after that things start to lose definition rapidly. And moreover, when we are only a small part of a much larger problem we tend to minimalize and rationalize our part in the problem. So it's okay if I take this extra long shower or use paper plates instead of flatware or buy fast food instead of cook, because in the scheme of things my choices don't mean much. But of course these problems will only be solved when each of us makes the decision to change.
In the case of fast food our natural subconscious tendencies outweigh our reason. Fast food is rarely in our self-interest, but the immediacy of the benefits, the food's appeal to our instinctual desires, and the feelings that stuck from marketing campaigns often overcome the negatives, which, though numerous, rational, and weighty, are minimalized by their lack of immediacy. So instead of doing what is in our rational self-interest, we order a combo meal.
This is where economics needs to grow the most. The model of human decision making typically employed in economic models is to a mind what a stick figure is to a man. Only as economists learn to account for this more conflicted, nuanced version of humanity will economics reach it's predictive potential.
in their own self-interest
The classical free market economics story runs like this:
Premise A: People only act in their self-interest.
Premise B: People often eat fast food.
Therefore: Fast food is often in people's self-interest.
And there are situations when fast food is in a person's self-interest. But eating it daily for lunch is not one of them. Nor is continuing to eat it after it has contributed to a person's obesity. But still people eat it. And eat it. And eat it. Why?
The answer, I believe, can be summarized in a single-word revision to Premise A above: "People only act in their own felt self-interest." The implication is clear - people are sometimes wrong about what is good for them.
A reasonable assessment of the decision to eat or not eat fast food at any given time might look something like this.
Pros: It's cheap, it's fast, it tastes good, it fills you up.
Cons: It lacks many key nutrients, it causes a dangerous glycemic response, it leads to obesity and it's associated illnesses, it increases the risk of diabetes, it leads to inflated costs in the healthcare system, it contributes to the homogenization of the food industry.
Looking at this list, you might again question why people eat fast food at all. I'll offer two reasons.
First, this list only includes conscious, rational decision points, while subconscious, extra-rational decision factors are also at play. In this case, two subconscious factors weight heavily on the positive side.
- Instinctual Desires: our bodies evolved to crave fat and sugar, since they are calorie-dense and rare in nature, but they are abundant at McDonald's - two patties worth of one and a super-sized cup of the other.
- Marketing Impressions: advertising seeks to associate images or feelings with certain brands or products, and fast food has benefited as much from advertising as any industry. When we step up to that counter, we're not just buying a burger; we're buying a feeling that was seeded there by months of careful marketing.
Second, the Pros in the list are immediate, meaning that if I decide to eat fast food I quickly experience each of the pros - the cheapness, the quickness, the taste, the fullness - while the cons are not immediate. I don't feel the lack of nutrients right away, I don't even know what the glycemic response does feel like, and all the other ones either won't affect me for a while, or contribute to some larger problem that one meal can hardly affect one way or the other.
Our brains are not geared for long-term thinking. As best I can see it, on average we can consider about one year in advance, and after that things start to lose definition rapidly. And moreover, when we are only a small part of a much larger problem we tend to minimalize and rationalize our part in the problem. So it's okay if I take this extra long shower or use paper plates instead of flatware or buy fast food instead of cook, because in the scheme of things my choices don't mean much. But of course these problems will only be solved when each of us makes the decision to change.
In the case of fast food our natural subconscious tendencies outweigh our reason. Fast food is rarely in our self-interest, but the immediacy of the benefits, the food's appeal to our instinctual desires, and the feelings that stuck from marketing campaigns often overcome the negatives, which, though numerous, rational, and weighty, are minimalized by their lack of immediacy. So instead of doing what is in our rational self-interest, we order a combo meal.
This is where economics needs to grow the most. The model of human decision making typically employed in economic models is to a mind what a stick figure is to a man. Only as economists learn to account for this more conflicted, nuanced version of humanity will economics reach it's predictive potential.
Labels: Economics, Human Economics
posted by James at 23:38
0 comments
.jpg)
