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behavior change

Nudge for good: How insights from behavioral economics can improve the world— and manipulate people

Roxanne Bauer's picture
Richard H. Thaler is a world-renowned behavioral economist and professor of finance and psychology. Recently, he was interviewed by The Economist. The discussion covers some of the fundamental studies in the field, like “save more tomorrow” which encourages people to save more by signing up to increase their savings rate every year and auto-enrollment for pensions that have drastically increased employee participation in pension funds.

Thaler also suggests, in the interview, that behavioral economics has the ability to influence human behavior for both good and bad. He argues that much of what behavioral economics does is remove barriers. The goal is not to change people but to make life easier, but that idea can be skewed by organizations or individuals looking to capitalize on the biases of people. Whenever he is asked to sign a copy of his book Nudge, he writes “nudge for good” which is a plea, he says, to improve the lives of people and avoid insidious behavior.

The list of ways companies nudge behavior is endless, and I would love to hear more examples from you all in the comments section. In the meantime here are a few- I’ll let you judge which ones “nudge for good”:

How Virgin Atlantic used behavior change communication to nudge pilots to use less fuel, reduce emissions

Roxanne Bauer's picture

The idea that there are untapped opportunities for improving the energy efficiency of individuals and homes is common.  Energy efficient windows, lightbulbs, and appliances are sold worldwide.  People are advised to “turn off the lights when you leave a room,” and schemes have been introduced to reduce energy consumption by tapping into social psychology. But what about large firms? Or entire industries? Companies, after all, want to minimize costs to save money, don’t they?  How about airlines, whose bottom lines are subject to the international price of fuel?
 
It seems rational, but the International Energy Agency does not mention the aviation sector in its Energy Efficiency Market Report, nor does Kinsey in their comprehensive catalog of potential energy efficiency measures. Most reports (that I could find) focus on regulation of commercial enterprises.  This is a shame. The environmental impact of aviation is clear: aircraft engines emit heat, noise, particulates, CO2, and other harmful gases that contribute to climate change. Despite more fuel-efficient and less polluting turbofan and turboprop engines for airplanes as well as innovations in air frames, engines, aerodynamics, and flight operations, the rapid growth of air travel in recent years has contributed to an increase in total aviation pollution. In part, this is because aviation emissions are not subject international regulation thus far and because the lack of global taxes on aviation fuel results in lower fares than one would see otherwise.
 
Interestingly, although perhaps not surprisingly, the National Bureau of Economic Research just released a working paper that suggests airlines’ fuel consumption can be reduced if they “nudge” the pilots to use less fuel, using behavioral interventions.

Reading ICAI’s review of DFID WASH results

Suvojit Chattopadhyay's picture

The Independent Commission for Aid Impact (ICAI), UK’s aid watch dog, today, released its review of DFID’s programming and results in water sanitation and hygiene (WASH). In this impact review, they take a close look at the results DFID reported in its 2015 Annual Report; results that cost £ 713 million between 2010 – 2014. 

Do read the full report here.

Some thoughts on the areas of concern in the report:

  • The focus on ‘leaving no one behind’ is spot on. It is easy to stack up impressive WASH numbers if one ignores the poorest and the most vulnerable in communities. Safe sanitation and hygiene need to be universal for health benefits to accrue to communities. Within WASH, sanitation is specifically complex, sometimes also called a ‘wicked problem’ – a challenge foremost, of inducing lasting behaviour change. The very nature of careful social engineering required to bring about this behaviour change seems to run contrary to some of the factors that make an intervention scalable – an ability to standardise inputs and break programme components down to easily replicable bits.
  • Within the broad basket of ‘service delivery’ interventions, WASH is one of the trickier sectors when it comes to measuring sustained impact, especially at scale. Naturally then, ICAI find that while DFID’s claims of having reached 62.9 million people are broadly correct, it is very hard to establish if the benefits are sustained. Therefore, the results reported remain at the ‘output’ level and that is what ICAI ends up assessing, even though what they set out to do is an ‘impact’ review. While the report speculates on sustaining benefits beyond the 2011-15 period, I wonder whether those that accessed the programme in 2011-12 continued to experience any benefits in 2015.
  • The link with government systems, in terms of implementation, monitoring and sustenance remains unclear: another typical WASH issue. Barring say, India, (and this is true especially in sub-Saharan countries, government WASH budgets are highly inadequate. A lot of the work that happens is funded by donors and this implies that monitoring and maintenance happens outside the official system. Achieving local ownership in such a context is a challenge.
  • ICAI finds it difficult to assess value for money (VfM) in DFID’s WASH programmes. On one hand, it finds that there isn’t enough competitive procurement, but also there is a lack of established metrics and benchmarks to analyse VfM. Following DFID’s own 3Es framework, an Economy and Efficiency analysis should be possile across the portfolio, and as far as I can tell, is rapidly being developed in the sector, and within DFID. However, partly as a consequence of the lack of ‘outcome/impact’ data, cost-effectiveness studies are likely to remain a challenge. This work by an OPM-led consortium should be particularly relevant in improving VfM analysis across the sector.

Do social factors determine “who we are” as well as the choice sets we have?

Karla Hoff's picture

The World Bank’s conference on “The State of Economics, the State of the World” was an opportunity to take stock of the emergence of new paradigms for understanding economic development.  Following Ken Arrow’s talk on the history of the neoclassical model and Shanta Devarajan’s comments on this model’s centrality in the Bank’s work, I had the opportunity to discuss two paradigms of how individuals make decisions that have recently emerged in economics, drawing on psychology, sociology, and anthropology.

Part 1: Five principles to behavior change: Why don’t they use these toilets?

Marta Milkowska's picture
They were simply not used. A few dozen toilets constructed in a small village in India worked well, except the villagers were not using them. Some conversations later, researchers discovered what had been overlooked during the planning phases: the morning open defecation practice was the only social activity for local women, otherwise spending all their time under the guardianship of their husbands. It was the highlight of their day, the time when they could freely talk, laugh, and gossip without the constraint of men and their day to day life.

New tactics to nudge habit change for open defecation behavior

Jacqueline Devine's picture
Open defecation remains a critical global health challenge, affecting almost 1 billion people around the world and contributing significantly to the estimated 842,000 people who die each year because of poor sanitation, hygiene practices, and unsafe water supplies [1].
 
Most behavior change approaches and frameworks for addressing open defecation have focused on relatively conscious, “reflective”  drivers of behavior, including people’s emotions (such as pride or shame), rational knowledge (e.g., of germ theory), social norms, and explicit action plans (such as commitments to change). Using the framework popularized by renowned social psychologist Daniel Kahneman [2].<, these factors can be described as “System 2” drivers of behavior i.e., relatively conscious and motivational factors. It is now well established, however, that human behavior can also be heavily influenced by “System 1” drivers i.e., relatively automatic, cue-driven factors [3].

Delhi’s odd-even plan as a public policy experiment

Suvojit Chattopadhyay's picture
Traffic in DelhiLate last year, Delhi’s Chief Minister, Arvind Kejriwal, announced a measure to tackle the severe air pollution crisis in the city. The proposal was to implement an odd-even plan for private cars on Delhi roads: cars with odd numbered registration plates would be allowed to ply on odd dates and those with even numbered registration plates allowed on the other days. There was an exemption list that included single women (or with children), public vehicles, medical emergencies, etc. This was to be piloted for a period of fifteen days, starting on 1st January 2016.

For a detailed account of how the city dealt with this rule, see here.  An excerpt:
During the odd-even period, the use of cars fells by 30 per cent while those car-pooling went up by a whopping 387.7 per cent, indicating the success of the government’s push towards that option. Delhiites using private auto-rickshaws went up by 156.3 per cent compared to the period before odd-even, while Metro use went up by 58.4 per cent.

On average, the respondents’ took 12 minutes less to commute from home to work during the odd-even period. Car and bus users reached their workplaces 13 and 14 minutes faster during the 15-day period


I will come to the outcomes of this pilot in just a moment. Outcomes aside, the Delhi government’s Odd-Even plan has yielded a rich bounty. It sets the template for citizen engagement with a public policy reform experiment: heightened awareness regarding the core issue, mass participation, intense public scrutiny, and a data-driven discourse. Let’s take these one-by-one.

The things we do: The economic, social, and personal costs of optimism

Roxanne Bauer's picture

Construction worker for the Panama Canal expansion projectIt is now the second week of 2016 and many people are working (or struggling) to follow through on their New Year’s resolutions. Whether they have decided to run a marathon, travel more, or save money, many people endeavor to create positive, new habits while shedding existing habits they think are less positive.  These resolutions, though, tend to last one or two months, fading into the backgrounds of their consciousness as spring arrives. 
 
It’s a typical combination of the planning fallacy, unrealistic optimism, and a bit of self-regulatory failure.
 
And this sort of challenge is not specific to New Year’s resolutions or even to issues pertaining to individuals.  City councils frequently draw up budgets that are too lean, road construction frequently lasts much longer than expected, and advances in technology often require much more investment than planners expect. So what’s at work here?  Why is it that people have a hard time judging the amount of time, energy, and resources that a project will take?

#5 from 2015: The things we do: How a simple text message is the difference between success and failure

Roxanne Bauer's picture
Our Top Ten blog posts by readership in 2015. This post was  originally posted on April 21, 2015.
 

A woman and her child get the anti-malaria drugs distributed in Freetown.Mobile phones are increasingly prevalent throughout the world, and researchers have found that sending text message reminders can help people follow-through with their intentions, significantly increasing the success of development interventions.

“People need to be reminded more often than they need to be instructed.”

These are the wise words of Samuel Johnson, an English author, critic, and lexicographer. Even though he lived more than 200 years ago, international development interventions are proving him correct today. 
 
Reminders for Malaria
 
It’s widely known that failure to adhere to a full course of antibiotic treatment leads to treatment failure and encourages bacterial resistance to antibiotics, threatening the sustainability of current medications. This is extremely important for malaria, which, according to the World Health Organization, results in 198 million cases each year and around 584,000 deaths.  The burden is particularly heavy in Africa, where around 90% of malaria deaths occur, and in children under 5 years of age, who account for 78% of all deaths. Moreover, low rates of adherence to artemisinin-based combination therapy (ACT) treatments has led to a prevalence of antibiotic-resistant Malaria in many parts of the world, particularly Africa. One of the biggest and simplest  reasons why people fail to complete the full treatment for Malaria is that they forget.


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