Tag: loewenstein

The i-frame and the s-frame

If the plastics industry is following the tobacco industry’s playbook, it may never admit to the failure of plastics recycling. Although we may not be able to stop them from trying to fool us, we can pass effective laws to make real progress. Single-use-plastic bans reduce waste, save taxpayer money spent on disposal and cleanup, and reduce plastic pollution in the environment.
Consumers can put pressure on companies to stop filling store shelves with single-use plastics by not buying them and instead choosing reusables and products in better packaging. And we should all keep recycling our paper, boxes, cans, and glass, because that actually works.

https://www.theatlantic.com/ideas/archive/2022/05/single-use-plastic-chemical-recycling-disposal/661141/

Those are the concluding paragraphs from a write-up in the Atlantic about how plastic manufacturing firms have been, shall we say, less than perfectly honest about their ability to actually recycle plastic.

You may or may not agree about the harm done to the environment due to singe-use plastics, but for the purpose of this blog post, please assume that this is a problem you want to try and mitigate. How might you go about it?

Chater and Loewenstein say that behavioral economists and policymakers have been getting it all wrong:

An influential line of thinking in behavioral science, to which the two authors have long subscribed, is that many of society’s most pressing problems can be addressed cheaply and effectively at the level of the individual, without modifying the system in which individuals operate. Along with, we suspect, many colleagues in both academic and policy communities, we now believe this was a mistake. Results from such interventions have been disappointingly modest. But more importantly, they have guided many (though by no means all) behavioral scientists to frame policy problems in individual, not systemic, terms: to adopt what we call the “i-frame,” rather than the “s-frame.” The difference may be more consequential than those who have operated within the i-frame have understood, in deflecting attention and support away from s-frame policies. Indeed, highlighting the i-frame is a long-established objective of corporate
opponents of concerted systemic action such as regulation and taxation. We illustrate our argument, in depth, with the examples of climate change, obesity, savings for retirement, and pollution from plastic waste, and more briefly for six other policy problems. We argue that behavioral and social scientists who focus on i-level change should consider the secondary effects that their research can have on s-level changes. In addition, more social and behavioral scientists should use their skills and insights to develop and implement value-creating system level change.

Chater, N., & Loewenstein, G. (2022). The i-frame and the s-frame: How focusing on the individual-level solutions has led behavioral public policy astray. Available at SSRN 4046264.

This is, in a sense, a continuation of yesterday’s post. The point of this paper, the one we’re discussing today is to say that we, as a society, have begun to think of i-frame solutions as substituting for s-frame solutions, rather than complementing them. And that, the authors say, is quite problematic.

Problematic for a variety of reasons, not the least of which is the fact that an excessive dependence on i-frame solutions can make it less likely that complementary s-frame solutions will be adopted. In addition, i-frame solutions in and of themselves tend to have either no, or close to no effects.

Worse, the idea that i-frame solutions may be enough in and of themselves, the authors say, is an idea that may well have been pushed on us by corporations:

Readers who see waste as a matter of individual responsibility may be surprised, as we were, to discover that this i-frame perspective can be traced to the influence of industry. Consider, for example, the ‘Keep America Beautiful’ PR campaign that baby-boomers will have had drilled into them, including the highly successful ‘Crying Indian’ ad – both about how individuals have a duty to pick up cans and bottles (Mann, 2021: 52-60). In the ad, an actor in Native American dress paddles a birch bark canoe on water that becomes increasingly polluted, pulls his boat ashore and walks toward a bustling freeway where a passenger hurls a paper bag out a car window. The ad concludes with an encapsulation of the i-frame perspective “People start pollution. People can stop it.” The ad, and the “Keep America Beautiful” campaign, which began in the 1950s and remains ubiquitous 70 years later, was actually the product of beverage and packaging corporations such as the American Can Co. and the Owens-Illinois Glass Co., later joined by corporations such as Coca-Cola and Dixie Cup.

Chater, N., & Loewenstein, G. (2022). The i-frame and the s-frame: How focusing on the individual-level solutions has led behavioral public policy astray. Available at SSRN 4046264.

Here’s the video:

Again, you may or may not agree that it is ‘big bad evil’ corporations that have been pushing these i-frame solutions upon us, and I myself tend to fall (surprise, surprise) somewhere in the middle. But I think it makes sense to think about whether one should exclusively push for i-frame solutions or think about some mixture of the two.

The paper covers much more ground across a very broad spectrum of topics, including healthcare and education, and I would strongly encourage you to read the whole paper. The point that I personally have taken away is a point that I am not entirely unfamiliar with – but it remains a point worth reiterating – that behavioral economics is a complement. Or as yesterday’s post puts it, it is the icing on the cake, not the cake itself.

For a change, I’ll quote the conclusion, but disagree with it:

Although today we see s-frame interventions as the path forward for behavioral public policy,
we, and many other behavioral scientists, previously had a very different picture in mind: that,
even where s-frame reform was required, a focus on additional i-frame interventions could only
help. But if the right s-frame solutions were available but not implemented all along, it is likely
that behavioral scientists’ enthusiasm for the i-frame has actively reduced attention to, and
support for, systemic reform, as corporations interested in blocking change intend. We have been
unwitting accomplices to forces opposed to helping create a better society.

Chater, N., & Loewenstein, G. (2022). The i-frame and the s-frame: How focusing on the individual-level solutions has led behavioral public policy astray. Available at SSRN 4046264.

The reasons I disagree with it?

  1. I honestly think behavioral economics has done more good than harm. I agree that the field may well have become a little overrated in the recent past, but on the whole, I think it to still be A Good Thing.
  2. I don’t think i-frame solutions have been (unwitting or otherwise) accomplices in the move to downplay s-frame solutions. Nor do I think that corporations have as nefarious a role to play as this paper seems to suggest. Don’t get me wrong: I don’t think corporations are ‘good’, but nor do I think they’re ‘bad’. The people who run them respond to their perceived incentives, just like you and I do.

But all that being said, a paper that introspects deeply about a topic that the authors care about as much as Loewenstein and Chater do is a wonderful one to read, and I strongly encourage you to do so.

Icing Without The Cake

My daughter much prefers eating the icing to eating the cake itself, and who can blame her? But, Tim Harford points out in a typically excellent column, that approach doesn’t take you very far in the field of applied behavioral economics.

Would we really have excellent universal pensions, a fit and healthy population, and a low-carbon economy, if only we hadn’t been distracted by Nudge? Of course not. But behavioural science is all too good at producing perfect icing for the policy cake; practitioners must never forget the cake itself.

https://timharford.com/2022/06/has-nudge-tempted-us-away-from-systemic-solutions/

The point of the column, and the academic paper it speaks about, is very simple: nudges are a complement to economic policies, they aren’t a substitute. And while behavioral economics, and nudges, are truly important, and relatively cheaper, they aren’t magic wands that will substitute for the time tested policies that economic theory will present.

And that is hard to disagree with!

The paper that Tim Harford refers to in his article is called “The i-frame and the s-frame: How focusing on the individual-level solutions has led behavioral public policy astray“. I’ll cover this paper and some of the points raised in it in greater detail tomorrow, but in today’s blog post, I want to cover an older paper written by them.

The paper in question is called “Putting nudges in perspective” and has also been written by George Loewenstein and Nick Chater. The paper (it’s a very accessible, short paper, please do read it) isn’t a mea culpa, nor does it excoriate behavioral economics and the power of nudges. But it does caution us, the readers, of the limits of behavioral economics and worries if the field has become a little too overrated.

First, some definitions and background. What is a nudge? Here is Thaler and Sunstein’s original definition:

Any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge,
the intervention must be easy and cheap to avoid.

Thaler, R. H. and C. R. Sunstein (2008), Nudge: Improving Decisions About Health, Wealth, and
Happiness, New Haven, CT: Yale University Press.

Please read the book to get multiple examples of what nudges are, how they have been developed and used. It is an excellent book to read, full of great ideas. And again, Loewenstein and Chater don’t mean to suggest that there is anything wrong about the idea or the way it has been deployed. As I said, they worry about excessive dependence on the idea of nudges.

In fact, they have a useful framework in the paper, which is worth looking at in greater detail:

https://www.cmu.edu/dietrich/sds/docs/loewenstein/putting_nudges_in_perspective.pdf

What is the type of problem you’re looking to solve? That’s given along the rows of this table. And what solutions might work for these problems? Those are given along the columns. And the point of the paper is that we’ve been focusing far too much on “I” and not been thinking about whether it really is the best solution, as compared to alternatives “A” through “H”.

To use just one example: smoking. Why is smoking a problem? Broadly speaking, for two reasons. First, smoking harms the smoker, and while one might expect the smoker to be aware of this, they might well end up misestimating the risks, or they might end up preferring the immediate pleasure and ignore the long term consequences, or think that they might be able to shake the habit anytime they wish. But also, and this is the second reason, second-hand smoking is an externality that can/should be addressed.

Now, if you think about it in terms of the table above, the authors say that this means that the problem belongs to row 3 (an internality) but also to row 1 (an externality). And to the extent that you agree that tobacco companies are likely to create marketing campaigns designed to exploit the behavioral biases of their potential and current consumers, you might think that it will fall in row 2 as well.

What of the solution? Well, in a problem such as this one, the optimal response might be one in which we marry a traditional economic policy response (taxes on cigarettes) with a behavioral response (graphic advertising on tobacco packets). Just one, of either sort, may not be enough, and in fact, there is a case to be made for more than one policy response from each of the two sets. In other words, the optimal policy response most likely lies in column B-E-H, rather than A-D-G or C-F-I.

But beware:

The question of how different interventions aggregate is interesting and important. On the one hand, as perhaps illustrated by the case of smoking, it is possible that different interventions aimed at the same problem can have a super-additive effect. This could occur if, for example, a multifaceted response is more likely to result in a change in norms, or if there is some kind of threshold of apathy or complacency that needs to be exceeded for people to change their behaviour. On the other hand, multiple interventions, especially if aimed at different target behaviours, could potentially divide individuals’ attention and lead to fatigue, resentment and possibly even a consequent backlash from intervention-weary individuals.

https://www.cmu.edu/dietrich/sds/docs/loewenstein/putting_nudges_in_perspective.pdf

Bottomline: behavioral economics does have a role to play in policy-making, but it isn’t a question of either using traditional economic ideas or using behavioral economics ideas. As the authors note, behavioral problems may have as an optimal solution traditional economic solutions, and vice versa.

Or, you might say – and old timers will have been waiting for this – the truth lies somewhere in the middle!

In tomorrow’s blogpost, we’ll take a look at Loewenstein and Chater’s latest paper on the topic.