Steven Levitt’s “Daughter Test” for Paternalistic Policies

Famous economist Steven Levitt, coauthor of Freakonomics, recently described his “daughter test” for assessing paternalistic policies:

Most of the time there is broad agreement as to which activities should be made criminal. Almost no one thinks that theft or violence against innocents is socially acceptable. There are, however, a few activities that fall into a gray area, like illicit drugs, prostitution, abortion, or gambling. Reasonable people can disagree as to whether it is appropriate to prohibit such activities… A common feature of these gray-area activities are that they are typically “victimless” in the sense that, unlike a theft or murder, there is no easily discernible victim of the activity…..

I’ve never really understood why I personally come down on one side or the other with respect to a particular gray-area activity….

It wasn’t until the U.S. government’s crackdown on internet poker last week that I came to realize that the primary determinant of where I stand with respect to government interference in activities comes down to the answer to a simple question: How would I feel if my daughter were engaged in that activity?

If the answer is that I wouldn’t want my daughter to do it, then I don’t mind the government passing a law against it. I wouldn’t want my daughter to be a cocaine addict or a prostitute, so in spite of the fact that it would probably be more economically efficient to legalize drugs and prostitution subject to heavy regulation/taxation, I don’t mind those activities being illegal.

It’s easy to poke holes in Levitt’s “daughter test.” If I had a daughter, I wouldn’t want her to not go to college. Does that mean college attendance should be mandatory for anyone with the requisite academic skills? I wouldn’t want my daughter to advocate racism or communism. If forced to choose, I’d much rather have a daughter who uses marijuana or cocaine than one who is a racist or communist. Does that mean that the government should ban racist and communist speech?

Levitt’s “daughter test” is useful, however, in highlighting an important aspect of paternalism. Many of its advocates, including some sophisticated scholars such as Levitt, too readily generalize from their own personal values and use those preferences as justification for prohibitionist policies.

As economist David Henderson points out, this displays intolerance towards others with different values. What is best for me – or my daughter – may not be best for everyone. Whether the costs of a risky activity outweigh the benefits varies greatly from person to person. That’s true even of dangerous or potentially addictive activities such as drinking, gambling, skydiving, smoking, or using currently illegal drugs. People differ widely in the degree of enjoyment they get from these kinds of activities, and also in the amount of risk they are willing to bear. For example, economist Kip Viscusi’s research found that smokers are just as aware of the risks of smoking as nonsmokers (both groups actually tend to overestimate the danger to health). Where the two groups differed was in their degree of risk-acceptance. Smokers, predictably, are much less risk-averse than nonsmokers.

Even worse, Levitt’s approach ignores the harmful indirect effects of prohibition. Even if the health risks of illegal drugs are very great, it doesn’t follow that the War on Drugs is justified. That policy kills thousands of people every year, imprisons hundreds of thousands more, and undermines family values in poor inner city communities. These costs far outweigh the health risks posed by illegal drugs themselves, especially if many of those risks are born by users who knowingly accept them.

Finally, as Will Wilkinson recognizes, Levitt’s approach indicates a flaw in the currently popular idea of giving experts the power to enact paternalistic policies based on their “objective” scientific judgment. This idea ignores the possibility that even the best experts – including top scholars like Levitt – will base paternalistic policies in large part on their personal values rather than science. Levitt should be commended for openly acknowledging this influence. He explicitly recognizes that his values override his professional judgment as an economist when he acknowledges that the “daughter test” leads him to support drug prohibition “in spite of the fact that it would probably be more economically efficient to legalize drugs and prostitution subject to heavy regulation/taxation.” Many other experts may not be as self-aware as Levitt is, and some might not be as honest.

The “rule of experts” approach to paternalism has various other flaws as well, some of which I described here and here.