What Paying Taxes has to do with Your Diet

Happy Tax Day everyone!

savings-and-behavioral-economics

I hope you all enjoyed the perils of receipt sorting and reporting our 2014 home economics. This annual exercise has me thinking about economics too, but maybe not about the type of economics you’d expect. I’m thinking about behavioral economics- the reasoning we use to make numerous decisions every day.

A couple of months ago, I was driving. It was a slow Monday morning commute - the kind talk radio was made for. An NPR radio segment discussed Americans’ retirement savings. Average retirement savings were much less than you’d imagine, and economists are concerned. With something as important as retirement savings, why is it so hard to make the ‘right’ choice?

NPR could just as easily have been discussing food and health. Even the same language would apply:

“An NPR segment discussed Americans’ diet choices. Average calorie consumption is much more than you’d imagine, and dietitians are concerned. With something as important as our diet, why is it so hard to make the 'right' choice?”

Most Americans understand that retirement is expensive, yet we’re not saving enough for it. The same can be said of our dietary habits. People know what to eat, they just have trouble making it happen.

americans-easier-taxes-than-healthy-eatingWhy is it that we can verbalize what’s good for us (i.e. save money, eat a balanced diet), yet we struggle to act on our own advice?

We are a stubborn sort. It’s difficult for us to deny short-term satisfaction in favor of long-term benefits. Perhaps this, in part, explains why 35 years of well-intended dietary guidance has had a relatively small impact on altering American eating patterns.

We eat what we like. No matter how nutritious something is, or how beneficial it is to our long-term health, we won’t sacrifice our taste buds. Taste is "king," after all. This pull for taste pushes us in a clear direction: don’t try to change your stripes entirely. Instead of trying to dramatically alter what we eat, maybe the more effective way to shift our health in a positive direction is to seek more healthful versions of foods we already enjoy. In that case, maybe we'd calculate that this trade-off for better health is actually worth it. Then, we'd perhaps stop feeling like eating healthfully is harder than doing taxes. Maybe David Freedman is on to something.