Obesity and Impulsivity

Blaming the victim, perhaps. But a new paper suggests personality traits correlate strongly with obesity outcomes. [HT: @bakadesuyo] They find very strong correlations between neuroticism and obesity, and between low conscientiousness and obesity, concluding:

Obesity is a major public health crisis that has multiple antecedents. Certainly many factors, other than psychological, have contributed to the recent societal increase in weight. Yet, even after controlling for major demographic and genetic risk factors, personality traits remain significant predictors of adiposity (Chapman et al., 2009; Terracciano et al., 2009). In fact, personality has an effect on BMI that is of similar or greater magnitude than that of socioeconomic status (Chapman et al., 2009) or the FTO-variant (Terracciano et al., 2009). The cognitive, emotional, and behavioral patterns associated with personality traits likely contribute to unhealthy weight and difficulties with weight management. Identifying the personality traits associated with obesity may help to elucidate the role of personality traits in disease progression.

My first worry is that being obese may generate measures of neuroticism (anger, for starters); fatalism consequent to poor obesity outcomes also could generate low conscientiousness. In other words, it's then hard to exclude reverse causation. But, they also run a few tests on whether personality traits predict weight gain, finding:

In the HLM analyses, the emotional aspects of impulsivity—N5: Impulsiveness and E5: Excitement-Seeking—were consistently associated with greater weight gain over time across the four measures of adiposity. Such individuals give in to temptation and seek out highly stimulating environments; food and alcohol may be one form of stimulation. And, in fact, sensation seeking has been linked with binge drinking (McAdams & Donnellan, 2009) and overeating (Davis et al., 2007). Such behavior may, over time, contribute to weight gain.

I worry that nudge or harder paternalistic measures targeting specific outcomes like obesity, or drinking, or whatever manifestation of high impulsivity/low conscientiousness you want to get angry about, wind up having perverse consequence by effectively subsidizing failure to invest in the general purpose personal technology of impulsivity control and conscientiousness.

Want to fight obesity and other bad stuff in the longer term? Come up with a good way of training kids in conscientiousness and impulse control.

Genetics and investment

So, here are three results that demand reading as a set.

First, the new finding: there's a genetic basis for differences in investor behaviour when it comes to the standard behavioural biases that folks find in the lab. They use the Swedish Twin Registry combined with a whack of data that Scandinavian countries seem happy to provide to researchers on individual tax filings. They've eight years of data matching twins (mono and dizygotic) with portfolio characteristics and trading. The difference in the correlation between mono and dizygotic twin pair behaviours identifies the genetic component of trading biases - the standard way of identifying heritability in all kinds of twin studies. Conclusion?

We find that a long list of investment biases, e.g., the reluctance to realize losses, performance chasing, and the home bias, are "human," in the sense that we are born with them. We base this conclusion on empirical evidence that genetic factors explain up to 50% of the variation in these biases across individuals. The psychological mechanisms behind the investment biases have apparently survived natural selection over hundreds of thousands of years, presumably because they maximize (or in a hunter-gatherer society used to maximize) the likelihood of human survival and reproduction (e.g., Rayo and Becker (2007) and Brennan and Lo (2009)). But in our current society, and when applied in the domain of investments, they may not always be appropriate.

They also find that education does little to attenuate the effects of genetics on observed biases. Now, why might that be? Their method looks at the difference between monozygotic and dizygotic twins. But intelligence is also strongly heritable - the second (very old) finding. The linked meta-study puts heritability of intelligence at around 0.8 and up from age 18 onwards.  Now, does IQ have any effect on stock market behaviour?

Let's turn to the newly published, but not new to loyal readers, finding that IQ drives both stock market participation and portfolio characteristics. Smarter people are more likely to be in the stock market and are more likely to hold diversified portfolios correcting for education and income.

So, put it all together. Heritable intelligence drives education choices, stock market participation, and behaviour once in the stock market. Some of the heritability estimates that Cronqvist and Siegel are finding (the first paper) are probably working through the IQ channel that Grinblatt, Keloharju and Linnainmaa (the last paper) found.  Surprisingly, Cronqvist and Siegel cite earlier work by Grinblatt & Keloharju but miss the more recent piece.

There are papers combining Swedish Twin data with IQ measures; I'd be more confident in findings of heritability of stock market trading characteristics if they were able to sort twins into IQ brackets and show stronger monozygotic than dizygotic inter-twin correlations on trading among those bracketed sets of twins (or otherwise control for IQ). Suppose that IQ predicts education (but with noise) and that IQ predicts trading behaviour (also with noise). The mono vs dizygotic correlation difference that's identifying the genetic component of stock market behaviour could be picking up how IQ is affecting stock market behaviour rather than necessarily picking up an independent additional effect of genetics on behavioural biases. I'm not sure that controlling for education does a fantastic job in fixing that. I sure wouldn't throw away the Conqvist results on the basis of this, but as the IQ data is there, it's worth checking. Education isn't mediating the effects of genetics, on this account, because education is caused by heritable IQ. My econometrics aren't strong enough to say that for sure, or at least I haven't written out the model to check it.

Thanks to Robin Harrison and Seamus for a quick chat on econometrics; errors all mine as always.

Behavioural blackboards

Behavioural economics usually leaves a bad taste in my mouth. Too much of it just feels like market failure theory as it was done in the 50s and 60s. Back then, you'd find papers with 20 pages of math proofs about how markets could never yield theoretically ideal outcomes, followed by a short paragraph talking about how government should therefore institute some policy to fix things; comparative institutional analyses weighing both the failures of markets and those of politics were rare. Substitute lab experiments for the math proofs and you've got rather too much of the behavioural economics. Niclas Berggren found that while a fifth of behavioural papers proposed paternalistic interventions, less than five percent worried about whether the behavioural anomalies giving rise to the policy interventions applied also to those who'd run the system. I'd touched on some of these issues in my talk at the CIS last week.

And, just as folks used to work backwards from the desired policy intervention to the market failure theory that could justify it, they can now work backwards from the desired outcome to the behavioural economics rationale. So if you don't like people getting compensation for organ donation or blood donation, just say that it'll interfere with altruistic donation and cite some experimental evidence on warm glow.

Mario Macis finds that, contrary to the behavioural blackboard, real world field experiments giving people real money for blood donations increases donations. 

As an economist, I wondered: Can we use economic incentives to stimulate blood donations? Economic intuition would suggest that the answer is yes, but theories in psychology and behavioral economics indicate that incentives might actually backfire if they conflict with people's intrinsic motivations to perform altruistic acts.

Together with Nicola Lacetera and Robert Slonim - my two research colleagues - I wanted to find a more definitive answer. We conducted a randomized controlled trial involving nearly 100,000 individuals, in partnership with the American Red Cross in Northern Ohio, to study the effect of economic incentives on blood donations.

In our study, we found that an advertised offer of a $5 gift card increased the likelihood of giving blood by 26 percent. A $10 gift card produced a 52 percent rise. And a $15 card caused an uptick of 72 percent. The offer of gift cards even caused people to motivate others to donate, including people who previously had never given blood. The incentives also induced people to switch the locations and dates of their usual blood donations to sites where the rewards would be available. Also, there was no effect on the share of individuals who presented at the drives but were ineligible to donate for medical or other reasons.

We concluded that economic incentives significantly increase donations from the public and can be used to increase donations in areas and at times of the year when blood supplies are particularly low.

Here's the paper (ungated). Some of the effect is due to displacement - some donors move to areas providing the incentives. But the result holds: supply curves slope upwards.

Moving to donor payment for blood might still not pass cost-benefit analysis: because you also have to pay for inframarginal units, the cost of the whole scheme in terms of new units donated wound up being $42 per unit. They reckon this easily passes cost-benefit given some estimates of the value of blood product collected.

Alas, under public health systems, the fiscal costs would fall on the government while the benefits would accrue to folks then able to get needed transfusions.

Update: Lynne Kiesling agrees on behavioural econ...