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So What You’re Saying Is That Crack Smokers Are Better Decision Makers Than I Am…

September 23rd, 2013 · No Comments
Decision Making · Policy

Every year, I teach a course in behavioral economics and am therefore reminded of how many biases I exhibit in my decision making. (In case you’re curious, being aware that an irrationality or bias exists can make the bias go away in some cases but not in others, which implies that I am pretty far up there on the list of self-aware irrational people.) To add insult to injury, I get it thrown in my face that at least in some situations, even crack smokers (note my deliberate avoidance of the word “addict”, even though even addiction could be rational behavior) appear to be rational decision makers:

At the start of each day, as researchers watched behind a one-way mirror, a nurse would place a certain amount of crack in a pipe — the dose varied daily — and light it. While smoking, the participant was blindfolded so he couldn’t see the size of that day’s dose.

Then, after that sample of crack to start the day, each participant would be offered more opportunities during the day to smoke the same dose of crack. But each time the offer was made, the participants could also opt for a different reward that they could collect when they eventually left the hospital. Sometimes the reward was $5 in cash, and sometimes it was a $5 voucher for merchandise at a store.

When the dose of crack was fairly high, the subject would typically choose to keep smoking crack during the day. But when the dose was smaller, he was more likely to pass it up for the $5 in cash or voucher.

“They didn’t fit the caricature of the drug addict who can’t stop once he gets a taste,” Dr. Hart said. “When they were given an alternative to crack, they made rational economic decisions.”

(Sidenote: How on earth did Hart get IRB approval for this???)

From an economic perspective, Hart technically hasn’t shown that the choices exhibited are in fact rational, since he hasn’t investigated whether the crack smokers were susceptible to framing manipulations, etc., but he has given evidence that demand curves slope downwards, even for crack.

This finding is very important to any debate about drug legalization, of course. In general, there are two main arguments to be made for restricting the use of drugs- first, that people need to essentially be saved from their own weaknesses, and second, that an individual’s drug use imposes costs on others in society that they are not compensated for (i.e. negative externalities). For better or for worse, findings such as these poke a pretty big hole in the first line of reasoning.

This actually isn’t so different from what we’ve been seeing regarding another form of (albeit metaphorical) crack- i.e. fast food. Calorie counts have been mandated on fast-food menus in a number of jurisdictions with the expectation that people would stop consuming so many calories if they were aware of how many calories everything has. Therefore, it’s not surprising that pundits talk about such menu labeling programs “don’t work” or “backfire” or whatever, when, in reality, calorie counts, almost by definition, help people make better decisions regardless of whether fancy people and policymakers agree with the consumers’ choices. (I find it particularly humorous that, as noted in the linked article, the fancy people are aghast that less fancy people seem to be using the calorie labeling as a way to get more calories for less money, since it just highlights the fact that the fancy people are privileged enough that they seem to have forgotten that calories are a form of energy and not just those things that prevent one from fitting into her size-2 cocktail dress.)

In other words, if your goal is not starving and having enough energy to do the multiple jobs that you likely have, then calories are a good thing and finding ways to get more of them for less money is not automatically stupid or irrational. Similarly, people seem to be bad at understanding the circumstances and motivations of the crack smokers:

“If you’re living in a poor neighborhood deprived of options, there’s a certain rationality to keep taking a drug that will give you some temporary pleasure,” Dr. Hart said in an interview, arguing that the caricature of enslaved crack addicts comes from a misinterpretation of the famous rat experiments.

“The key factor is the environment, whether you’re talking about humans or rats,” Dr. Hart said. “The rats that keep pressing the lever for cocaine are the ones who are stressed out because they’ve been raised in solitary conditions and have no other options. But when you enrich their environment, and give them access to sweets and let them play with other rats, they stop pressing the lever.”

This suggests that the fancy people might also have cause and effect backwards when it comes to understanding crack smokers…and why I’m not particularly reluctant to give money to homeless people who might use it to buy booze. (If I were homeless, I would want to drink too. Hell, I’m in my office and want to drink right now, so I know that I’m not in a place to judge.) Overall, this is a good illustration of how there is a lot of opportunity for economists, medical researchers to collaborate with sociologists, anthropologists, etc., since important questions such as “are people being irrational/stupid when smoking crack?” can’t effectively be answered by only looking at one piece of the puzzle at a time.

Hart should go have a beer or six with Roland Fryer, since it seems like they’d have a lot to talk about, both professionally and personally.

Tags: Decision Making · Policy

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