Friday, February 15, 2008

From academic thought piece to policy proposal

In this paper, we discuss a range of regulations that buttress consumers’ long-term behavioral intentions and reduce the likelihood that momentary impulses will undermine those intentions. All of these regulations, which we call Early Decision regulations, encourage consumers to make forward-looking decisions that they cannot easily reverse later. ...

Self-regulation refers to a broad category of schemes that allow the consumer to create her own regulatory constraints. With self-regulation, the consumer is only constrained if she wants to be. ...

In the simplest case of self-regulation, buying cigarettes would require a cigarette photo ID card. To obtain a cigarette card, a consumer would fill out a (confidential) application form, obtain an appropriate photograph, and submit her application to the regulator with a modest annual fee (e.g., $20). After an intentional delay of one month, two copies of the card would be delivered, and the cards would expire a year after receipt. The consumer would reapply every twelve months to maintain a current card.

Such a system would have the following benefits. First, a card system makes it possible for a smoker to commit to temporarily stop smoking by simply cutting up her current cards. Second, for a smoker who is trying to quit, the expiration date of her current cards creates a salient quit date. Third, a card system creates a default of not smoking, since not applying for the cigarette card is the path of least resistance. Fourth, the card system discourages impulse initiation or resumption of smoking, since application delays make it impossible for a person without a card to immediately obtain one.
--John Beshears, James Choi, David Laibson, and Brigitte Madrian, "Early Decisions: A Regulatory Framework"

Smokers could be forced to pay £10 for a permit to buy tobacco if a government health advisory body gets its way.

No one would be able to buy cigarettes without the permit, under the idea proposed by Health England.

Its chairman, Professor Julian Le Grand, told BBC Radio 5 Live the scheme would make a big difference to the number of people giving up smoking.

He said it was the inconvenience of getting a permit - as much as the cost - that would deter people from persisting with the smoking habit. ...

"You've got to get a form, a complex form - the government's good at complex forms; you have got to get a photograph.

"It's a little bit of a problem to actually do it, so you have got to make a conscious decision every year to opt in to being a smoker."
--BBC on the first serious Early Decision movement

1 comment:

Jess Austin said...

Self-regulation seems like a misnomer here. I guess you could consider me to be most concerned about agency effects (and the perverse inconvenience effects which frankly seem to be a subset of those). I would only contemplate these measures because the markets under consideration offer ample opportunity for our subjectively-determined self-interest to be undermined by our baser natures. In effect, there are agency concerns on both sides of the question.

Kudos to the paper's authors for mentioning privacy effects. While I don't so readily assume that such concerns can be designed around, acknowledgment is a step in the right direction. Perhaps the authors could be encouraged to also consider the inherent costs of any early-decision program? Presumably these program costs would be acceptable to those whose decisions are regulated. However, the non- and satisfied- populations seem certain to comprise a majority, and they might not be so ready to subsidize the indecisive. It might be an interesting exercise to incorporate this and the other deleterious effects into your model.

The British proposal sounds a bit more coercive. It seems like nothing so much as a driver's license, to which it is identical on many salient points. (I guess there is no equivalent of driver's ed, but it doesn't tax the imagination to envision a sort of periodic smoker's re-ed.) I appreciate that academic study of the program could be largely divorced from such libertarian concerns.