Economics and New Year’s Resolutions

In recent days, we’ve introduced a pair of regular guest bloggers, Ian Ayres and Sudhir Venkatesh. We are happy and proud to now introduce a third, a terrific addition and no stranger to readers of this blog: Justin Wolfers, an economist at Wharton and a great explorer of everything from racial bias in N.B.A. refereeing to the decline in women’s happiness to divorce myths.

With the holidays upon us, it’s hard not to turn the economists’ gaze to the rituals around us. So let me ask, what exactly are New Year’s resolutions about? Here are seven theories, collected around my Christmas Eve table:

1. Aspirations: a statement (to self; to others?) of who and what I want to be. New Year’s Eve is simply a focal point for this statement of aspirations.

2. Commitments to self (or my future self): a statement of what I want to be. And if I don’t achieve it, I will be left with the guilt of not having lived up to a promise to myself. If that is costly enough, then the commitment may be useful.

3. Commitments to others: many of us describe our commitments to our friends. Henceforth, it is their job to hold us to it, or else to make us feel bad. Describing my commitment to my friends is like posting a bond, based on my future good behavior. (And perhaps this is a less costly commitment than betting at Stickk.com).

4. A clean slate: we rarely respect the irrelevance of sunk costs in our behavior. The New Year is a clean slate. If my behavior is history dependent (why not eat the chocolate cake if I’m already overweight?), then the clean slate allows my behavior to escape past poor behavior.

5. A signal: I only get to make a small number of resolutions, and so making a resolution about fitness is credible, relative to the fact that I chose not to make a resolution about tardiness. (In this sense, it is like the A.E.A. signaling system, where aspiring assistant professors can make a New Year’s resolution that they really, really would like to work at two specific universities.) Perhaps related to Nos. 2 or 3.

6. Intertemporal reallocation: diets in January follow gluttony in December. Or hard work in January follows slacker time in December. And this is more efficient than forgoing all that terrific food/all those wonderful celebrations/all that time off in December. By this theory, it isn’t surprising that so many resolutions are about health/diet/fitness, and it isn’t any concern that we rarely respect these resolutions past February.

7. Cheap Talk: New Year’s resolutions are simply hot air, stated at around 11:55 pm, on a night involving plenty of alcohol. They are rarely respected, and there is no way for them to be enforced. They are a ritual, but not more important than kissing a loved one 5 minutes later.

Beyond theory, what about empirics? Let me report the results of an informal poll around our holiday table: none of the men (out of 3) and 2 of the women (out of 4) typically make New Year’s resolutions, and only one person actually expects to keep her resolutions. Is this typical?

Do you make New Year’s resolutions? Why or why not? Comments are open.


dd

You're combining two issues in one.

First of all, why make a resolution if there's no committment. It's cheap talk.

Second, why on New Year's? You can make a resolution anytime.

I don't know the answers, but I suspect that the second can be partially explained by time inconsistent preferences (e.g. hyperbolic discounting). I prefer eating chocolate now and dieting tomorrow, but I would prefer not eating chocolate at t=1 to avoid dieting at t=2.

Thus, I would want to commit to stop eating chocolate at some time in the future, and New Year's is a convenient time to choose. (There has to be more here since I could always choose any future date. It must be related to some of your ideas - some sort of coordination.) This is related to Benartzi and Thaler's idea of committing to save in the future.

Matt, Gainesville, FL

If you want a good laugh about resolutions, just hang around a gym for a few weeks at the beginning of January. Watch the New Year's Crew arrive in droves at the beginning of the month and disappear by the end. That seems to be archetypal for New Year's resolutions.

Steve

I pledged to lose 50 lbs and gained a few. I'm normal weight and would be underweight if I did lose the weight (~130 lbs, 6'2''), so I'm happy with the outcome.

I'm resolving to lose 50 lbs again this year too.

Nico

I kept my resolution from last year. I lost about 25 pounds. I think its the firts time I ve done that. I will have the same resolution this year and will add no smoking to it. tell u next year how did it go. I had junst another resolution, go to India. Which i did. But both resolutions have been recurrent for the last decade, so maybe they just matured this year in particular.

Meryem

I still make my New Year's Resolutions at the beginning of fall-- it makes more sense than the change of a calendar year for me, a student.

Last September's resolution? To take a 20-minute walk every day, on top of whatever gym activities I might pursue. After four months, I'm still going strong, though I may skip a day or two per month. It gives me fresh air and some time to think. I hope to do it for the rest of my life.

chica

I don't make New Years resolutions. I just feel if there is something I really want to do I will commit to it any time of the year. Not that I do that either :)

Rachael Kvapil

I make my New Year's resolutions way back in October, the month I was born. Prior to that I spend the previous month evaluating my lifestyle, except this year when a death of one of our friends really hammered me hard and the contemplation was deeper and more severe that in the past. By New Year's, I'm already working on whatever it is I wanted. Rarely does it have to do with the superficial health/diet/exercise, but more on skill building much of which is physical since I'm a dancer.

Last year my resolution was to divorce myself from crazy bosses and high-stress jobs.

Rachael

Greg

I choose not to make any New Years Resolutions anymore. In 2005, I made one last New Years Resolution: to no longer make any new years resolution. Any behaviors I want to change, I start when I think about it. I do not wait for January 1. Any things that I want to accomplish, I start working towards them when I am able to. It seems strange to engage in negative behaviors when realizing that they are negative. It seems even stranger to wait till a date in the future before one begins to change one's life. It seems, to me, that it is better to start small and start the change sooner than to engage in 'cold turkey' tactics on January. Thus, in August, I realized I needed to lose weight. And so I began exercising more and eating less. To date, I have lost 42lbs(from a start of 212.5lbs and a height of 5'9). Now I need not make a resolution about going to the gym or eating right. Especially since my last resolution that I made in 2005 is one that I still keep, nearly 3 years later.

Read more...

htb

I don't usually make such resolutions, nor does anyone in my family. However, my husband made two this past year, and kept them both. One was to plan, fund, and take a multi-country see-all-the-scattered-relatives trip, and the other was to never click on a headline involving Paris Hilton. I'm not sure how you would categorize these.

Sonali

I find making New Year's resolutions to be a very self-actualizing experience. I try to make resolutions that are practical and pretty specific. For instance, instead of broadly stating that i will lose x amount of weight, i will say that i will go to the gym x number of times a week, skip the fatty starbucks drinks (or keep it to a minimum). And even though there is so penalty for failing to fulfill a resolutions, i do find it rewarding to go over my resolutions and see how much i have accomplished. I guess the trick is to not to expect miracles, but instead baby steps. The New Year also signals the start, a fresh slate if you may ... which is why i make my resolutions at this particular time.

FaTfu

I always found New Year's Resolutions odd. If I want to get something done, I'll just resolve to do it then instead of waiting.

Byron

"So this is the New Year
And I have no resolutions
No self-assigned penance
For problems with easy solutions"
--Death Cab for Cutie

Brent

My company gives us the week off between Christmas and New Years. I use this time to set forth my goals for the year. I don't call them resolutions, I call them goals. I hang them in my office for everyone to see. My wife gets a copy. This way I and others will hold myself accountable for what I accomplish. I do add to them from time to time, but for the most part, use them as a way to set my course for future and growth.

SFCohen

Like Brent in an earlier comment, I do take the time to think about goals for the coming year. Some are pragmatic (like paying down x dollars in debt), some a personal (like continuing to take cello lessons), some are wishful (like I will go to sleep half an hour earlier each day).

I do think there is something about a new beginning that offers us the chance to look at our lives anew. While it is easy to decide to do something, some people need the added motivation of a new year, a clean slate, a new chance to act. It's not stupid...it's personal and quite beautiful in that each individual can articulate their aspirations, no matter how personal, practical, or wishful. If we don't articulate our hope, what are we left with?

Owen

Given so many economists and "realists" around telling you that resolutions are false or never come true, New Year's is one of life's few opportunities to publicly decry the cynacism of others by entering into the commitment yourself.

Ryan

Pretty simple, really. I'm making a New Year's resolution this year because if I don't, I'll probably die of a heart attack by 30.

Opus

What on Earth is the connection to economics here? Has Freakonomics now claimed the sociology, psychology and anthropology of popular culture to be a realm of the dismal sciences as well?

Sundeep

For years when I was at school in Calcutta, December-January was the best time of the year. The weather was balmy and a longish break meant we spent all our time outdoors playing cricket in the day, badminton at night and picincs every weekend. I woke up every morning to the promise of more fun. That's when I figured that I would make a resolution every year-end to have even more fun the next year and I would actually check out if I did better. Of course as I hit middle-age, I abandoned it for some mind-numbing career and self-improvement goals. They've added nothing to my life.

JEFFREY LOURIE

Every year I make a resolution to not make any resolutions. And, for some inexplicable reason, I have always failed. Please advise.

katman

"Beyond theory, what about empirics?"
I think I'm going to like reading Mr. Wolfers, such interesting dinner-time conversation.