Much has changed since Facebook. Whether waiting in line for coffee, attending an awkward social event or even commuting on public transport, Facebook saves you from the awkward eye contact with strangers. As amazing as Facebook is though, we all have that friend who uses Facebook way too often – tagging people in the latest memes, changing their profile photo (too) often and constantly sharing random posts. This is a perfect example of how addicted some people have become.
This brings us to the question of rationality; is it irrational to be addicted to an application that makes you scroll through a sea of posts when you know you should be studying? In fact, it’s irrational to be addicted to anything at all, right?
Rationality is defined as consistently making decisions that maximise long-term utility, where utility is a measure of happiness or well-being. Addictions seem to be the antithetical to rationality. However, the model provided by Becker & Murphy describes rational addiction as instances where ‘individuals realise the addictive nature of choices they make, but may still make them because the gains from the activity exceed any cost through future addiction’. For example, Sigmund Freud, a major contributor to psychology, became a cigar smoker despite knowing the health risks. He believed that smoking enabled him to work more effectively. Rational addiction theory argues that for Freud, if the benefit of enhanced work performance outweighed the future health costs, this could be considered a rational addiction.
Evidence for the rational addiction model
Empirical research such as Chaloupka’s studies on cigarette consumption and Bentzen & Eriksson’s work on alcoholism support the rational addiction model.
The discipline of behavioural economics echoes the concept of rational addiction and argues that the assessment of irrationality or rationality depends on the context of the situation. Cost-benefit analysis that is specific to the context determines whether the addiction is rational or not.
Issues with the rational addiction model
Admittedly, the theory is not without its flaws. The model is a mathematical one, and econometric testing has produced some strange results. In Auld & Grootendorst’s study, results based on Becker’s rational addiction model show that milk is as addictive as cigarettes. But as milk is not an addictive substance, this raises concerns about the model’s accuracy.
Furthermore, the evidence is also mixed. Baltagi & Geishecker’s empirical tests of alcoholism in Russia fail to support rational addiction theory, while Bentzen & Eriksson’s empirical research on alcoholism in Nordic countries supports rational addiction theory. This is also the case with cigarettes, with two conflicting bodies of evidence.
According to Sloan & Yang, a lot of promising economic research uses the rational addiction framework, but empirical research based on this model is inadequate.
Although the theory is somewhat flawed, there is a broad body of economic literature to support the theory of rational addiction. This does not mean that behaviours associated with addictions are rational though. But perhaps, for certain individuals, this Facebook addiction could be a rational addiction that is allowing them to the best versions of themselves.
 Becker, GS, & Murphy, KM (1988), ‘A Theory of Rational Addiction’, Journal of Political Economy, vol. 96, no. 4, pp. 675.
 Chaloupka, F (1991), ‘Rational addictive behavior and cigarette smoking’, Journal of Political Economy, vol. 99, no. 4, pp. 722; Bentzen, J, & Eriksson, T (1999), ‘Rational addiction and alcohol consumption: Evidence from the Nordic countries’, Journal of Consumer Policy, vol. 22, no. 3, pp. 257-279.
 Docker, E, & Feichtinger, G (1993), ‘Cyclical consumption patterns and rational addiction’, American Economic Review, vol. 83, no. 1, pp. 256.
 Orphanides, A, & Zervos, D (1995), ‘Rational addiction with learning and regret’, Journal of Political Economy, vol. 103, no. 4, pp. 739.
 Auld, CM, & Grootendorst, P (2004), ‘An empirical analysis of milk addiction’, Journal of Health Economics, vol. 23, no. 6, pp.1117-1133.
 Baltagi, BH, & Geishecker, I (2006), Rational alcohol addiction: Evidence from the russian longitudinal monitoring survey, St. Louis: Federal Reserve Bank of St Louis, Retrieved from http://search.proquest.com/docview/1698641187?accountid=12528
 Bentzen, J, & Eriksson, T (1999), ‘Rational addiction and alcohol consumption: Evidence from the Nordic countries’, Journal of Consumer Policy, vol. 22, no. 3, pp. 257-279.
 Sloan, FA, & Wang, Y (2008), ‘Economic theory and evidence on smoking behavior of adults’, Addiction, vol. 103, no. 11, pp. 1777-1785.
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