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Choice

A celebration of Richard Thaler’s Nobel Prize and a new field – Behavioral Development Economics

Karla Hoff's picture

Could a parent’s decision to vaccinate a child depend on a free bag of lentils?  The premise seems implausible:immunization can be a matter of life and death, and a bag of lentils is worth only a dollar.  Yet a randomized controlled trial in India showed that a gift to parents of a 1 kg bag of lentils and a set of plates can dramatically raise the percentage of children protected against major disease (Banerjee et al. 2010).  Providing a quality immunization camp alone increased the percentage of fully immunized children from 6% to 18%.  The addition of the lentil and plate ‘incentives’ raised the figure to a whopping 39%.  How can we explain the outsize effect of a gift of everyday household items?

The Things We Do: Design with the User in Mind

Roxanne Bauer's picture

City planners and design professionals have long known that the way in which physical space is constructed affects human behavior. Walkways, doorways, and lighting direct people for strategic reasons, colors and textures impact our sensory experiences, and the size and flow of space affects our social interaction.

Physical space is also important in designing transportation infrastructure where entry and exit points direct the flow of traffic, ticketing affects efficiency, and roadways shape the speed and orientation of traffic.

As one architect puts it, “Designers often aspire to do more than simply create buildings that are new, functional and attractive—they promise that a new environment will change behaviours and attitudes.”

Consumers consider these aspects when they decide how to travel in a process known as translation in which they consider personal benefits and costs of a product. In this case, people make ask themselves, ‘I know a new bus line is available, but will it save me money or time?’ or 'I can ride my bike, but will it be safe?'  The process is complex, and occurs over time and through repeated interactions.

In order to put design to good use in changing attitudes and behaviors, the city of Bogotá immersed itself in the lives of its residents and created solutions to tackle the heavy congestion and lack of safety that were common on the city’s streets. They used the economics of nudge, paired with design principles, to increase public use of bicycles and buses.