Supermarket competition is a good thing!!

Is someone trying to be ironic when they say that a new chain store that sells close to expired stock cheaply is a bad idea because it will “cause obesity”. Adolf at No Minister is right here when he says that these guys are doing the right thing, and that the critique on the grounds of obesity seems out of place (ht Kiwiblog).

If people want to eat enough and put on some weight that is their decision. After all WTF is an “obesity epidemic” – I didn’t realise people could gain weight just from looking at me after I’ve eaten 😉

Say that there is an externality from obesity – well then we should try to solve that, not regulate the supply of food. No the idea of an externality may lead to a “fat tax“. Poor information for consumers might drive us to label foods in better ways. But there is no value to be gained from refusing to allow competition in supermarket sales.

Truly, these people that focus on obesity DO NOT CARE about the happiness of people – they only care about the fact that they don’t like obesity. It makes me sad 🙁

And if you try to defend these claims on a basis similar to “people don’t know what’s good for them” I suggest you just write down what you just thought and read it …

  • Maybe you just define happiness differently from those who think they can improve the lives of others? There are plenty of philosophers who don’t think of happiness the way economists do.

    But, within an economic framework, I would cite the lack of commitment devices to control future behaviour. Lack of availability is a pretty effective commitment tool 😉

  • @rauparaha

    It’s true that the market doesn’t seem to provide any commitment devices, but I take that as evidence that people don’t really want to control their future behaviour as much as many suppose. There doesn’t seem to be any barrier to stop someone from setting up service that, for example, has you pay an upfront fee which it refunds you based on weight loss or whatever.

    I suspect much talk of time inconsistency is a post-hoc justification for people’s extreme or socially unacceptable preferences. Bryan Caplan’s paper on the economics of mental illness is relevant here.

  • Robbie

    The same logic would drive you to subsidise smoking (if you accept the studies that suggest smokers are a net benefit to the health sector).

    Surely it isn’t that hard to believe that people make suboptimal decisions sometimes? Dan Ariley has done work that suggest people make choices / hold views when aroused that they view as suboptimal when they’re not aroused. Note that just because we think people sometimes make suboptimal decisions isn’t sufficient as an argument for government intervention.

    I agree though that in this case, discount chocolate seems a long bow to draw, along the lines of “milk shouldn’t cost more than coke” nonsense.

  • Yeah, I definitely think time inconsistency models are a good fit with observed behaviour. However, regulating discount food stores seems a particularly bad way to go about solving the problem. I just think Matt’s wilfully ignoring the other possible justifications for opposing these stores in order to get in a dig at public servants. Shame on you Mr Nolan 😛

  • Hasn’t a Sugar Tax already been tried?

  • New York state has successfully implemented a tax on soda and candy. It’s small, but could balance the externalities that they cause. I think a tax should be levied on foods that the government deems “unhealthy”–obviously through several objective albeit arbitrary criteria. This would help bridge the gap between the cost of unhealthy foods and the cost of healthy foods. Essentially its the same thing the government does with any negative externality–water pollution, air pollution, etc.

  • Hi all,

    Originally I was going to write about time inconsistency in this post, but instead I decided to take a position against it and see what you guys say – and you guys have definitely provided.

    @rauparaha

    I am not digging at public servants – hell last time I talked about public servants I defended them 😀 . Furthermore, this complaint had nothing to do with public servants did it?

    Also I am allowed to willfully ignore other arguments in my post – we have close to zero cost for commenting and writing on other blog (or even on this blog for other authors) so if I miss an argument someone else can bring it up. It isn’t like I’m writing anything authoritative 😛 . However to reiterate, I don’t understand how this post attacks public servants at all.

    In net terms I am against regulating this storetype. I realise there is a time-inconsistency problem, I experience this with chocolate on a daily basis, but if I was sufficiently concerned about this ex-ante I would set up a costly commitment mechanism.

    Now, we know that any welfare loss through time inconsistency must be below the cost of setting up the commitment mechanism. As there is a significant gap in time between the purchase and consumption of said food I think there is a pretty low cost mechanism right there – just don’t buy the frikken stuff. Furthermore, junk foods come in a range of sizes, if you want to prevent yourself eating too much you can buy a smaller one.

    As a result, I don’t see the time-inconsistency problem as being that significant here – so I agree with Brad on this.

    I see Rauparaha also raised other moral frameworks – now of course this is true, as I made a conclusion I made implicit value judgments.

    However, I personally believe that any moral framework that isn’t reducible to utilitarianism is suspect, so although it is fine to disagree with me there is no ground for change here 😀

    @Robbie

    I can believe that peoples expectations or beliefs might have errors, and that there could be scope to help under these grounds. But I am not willing to say that people would make ex-ante suboptimal decisions given there expectation and belief structures.

    And if it is shown that smokers are a true net benefit to society then I have no problem with subsidising smoking. But I would need to be shown this was the case first.

  • @Matt Nolan
    Ha, commitment mechanism??? You’re trying to commit your future self. Your future self is the only person who can observe the outcome. I see the odds of them sticking to the unenforceable commitment as slim. I think the number of people who fail to break habits that they perceive to be detrimental is evidence of the fallibility of such mechanisms.

    I’m not saying your moral framework should change. But bear in mind that even some utilitarians feel differently about happiness to most economists. Saying that people don’t care about happiness is, as I’m sure you’re aware, only true under some assumptions about the nature of happiness.

  • @rauparaha

    “Ha, commitment mechanism??? You’re trying to commit your future self. Your future self is the only person who can observe the outcome. I see the odds of them sticking to the unenforceable commitment as slim. I think the number of people who fail to break habits that they perceive to be detrimental is evidence of the fallibility of such mechanisms.”

    If you don’t buy the chocolate, or buy a smaller portion, then when your future self goes to consume it they are constrained – that is a commitment mechanism. In my mind that is one of the main reasons why small portions are only slightly cheaper than large portions of choc.

    “I’m not saying your moral framework should change. But bear in mind that even some utilitarians feel differently about happiness to most economists. Saying that people don’t care about happiness is, as I’m sure you’re aware, only true under some assumptions about the nature of happiness.”

    Aha and … . I have no real interest in discussing the “moral framework” here unless we discuss tangible alternatives. Why? I AM discussing a conclusion here, I am applying value judgments. Saying that there are potentially other value judgments doesn’t really further the discussion 😀

    Give me a framework where these people value the other persons happiness.

    I’ll give you one – when they think the other person is too stupid to do what they want to do. If that is the case I am happy to keep the claim that they “don’t value the happiness of other people” in my own value ladden post 😀

  • “…these people that focus on obesity DO NOT CARE about the happiness of people – they only care about the fact that they don’t like obesity. It makes me sad”. I understand what you meant here because you want people to be happy. But for me, you cannot achieve happiness if the end-result is harmful. I mean, being obese is not really good because of the health risk. Happiness can be achieved in other ways just make it sure it will do good and not harm the person in the end.

  • No future commitments here!! I like your idea of conveying things. You go in my RSS reader.

  • I know in some countries of the world where the supermakets are ran by a single company and they can pretty much do anything they want with the pricing and supply often ending up in the black market instead of the shelves.