Behavioural economics is proving to be a highly valuable tool for convincing people to pay fines and taxes on time.
Seemingly small changes like the wording of a letter can drive efficiencies for government and hopefully even lead to fewer people losing licences over unpaid fines.
But while they cumulatively can make a difference, most of the innovations we hear about are marginal improvements.
Could behavioural insights instead be applied directly to some of society’s biggest problems, like family violence or social mobility? That’s the question currently being asked by some of its practitioners.
“The wins are potentially much bigger, much richer,” explains David Halpern, chief executive of the UK Behavioural Insights Team.
New South Wales is currently looking at how it could harness what we know about the irrational side of human behaviour make an impact on family violence.“It’s hard to pass a law to say, ‘You at the back of the room need to pay attention.'”
Some ideas are relatively simple and cheap. Many people don’t show up to court dates because they forget, so sending an SMS reminder has helped to boost attendance. Writing forms in simpler language — rather than lawyerly jargon — improves the chances of parties understanding what they’re actually being asked to do.
There are new types of interventions hoping to shift behaviour on a more fundamental level, too. NSW is testing a program with perpetrators to identify what kinds of situations increase the likelihood of committing violence and then working through how to stop offending before it happens.
For some, poorly developed self control acts as an enabler. Looking at what has worked for more trivial problems might help reduce something as serious as family violence.
“We know from behavioural economics that if you want to go on a diet, you don’t fail when you are full, it’s when it’s the end of the day and you’re hungry and someone puts a cake in front of you,” says Halpern.
If you make a plan in anticipation of those moments and think through your own weaknesses, you’re more likely to be able to exercise control over your responses.
“You consider what your goal is — is it that I want to spend more time with my kids? You break that down into: when do I lose my temper? It’s when I drink,” Halpern explains.
“So I know that if I drink I need to make sure I have somewhere to stay. It’s about helping people plan in advance.
“We are quietly optimistic that even simple things like that can make a big difference. We know it works on simpler behaviour, so hopefully it will work for something like family violence.”
NSW is the first place in the world to apply this type of intervention to family violence, he adds. “It’s something to be proud of.”
There are also plenty of opportunities in areas such as apprenticeships, flexible working and labour market design, to name a few.
Experiments are being run in the UK to help kids do better in class. It’s one of the many areas of public policy that doesn’t respond well to legislative intervention.
“It’s hard to pass a law to say, ‘You at the back of the room need to pay attention,'” Halpern says. So they’re trying new approaches with young people who are failing maths or English.
“One is mobilising support around the person. You ask a teenager, ‘How was your day at school?’ and the response you often get is, ‘It was fine,’ or even just a grunt.
“The students are asked to nominate two people to receive information about what they’re doing in class. So their parents get a text saying that, ‘The student is reading this book in class this week, you should ask about X character.’ Doing this increases attendance and pass rates by 6% — that’s an enormous effect, and it costs a few dollars.”
A similar trial with apprentices and their employers to help them apply what they are currently learning seems to be leading to better outcomes, too.
Boosting university attendance among young people from disadvantaged backgrounds is another area of experimentation. Universities in the UK spend the equivalent of AUD$1.5 billion each year reaching out to low SES kids.
The experimenters found schools with low university attendance rates and identified young people who were the exceptions from those places, who had gone on to university and done well. They helped two of them write a letter to current students and sent out 5000 of them.
“It increased applications and, importantly, acceptances into elite universities by about a third. That’s a powerful effect and much much cheaper than the normal outreach,” Halpern notes.
The possibilities for the future of behavioural insights are huge, he says.
“We have so much more to do even on the basic questions. With so many areas of what government does, nobody really asks, ‘How do people really experience things?’
“We are applying experimentation to all sorts of areas we wouldn’t have thought of before. One of the ironies about behavioural economics is that it’s been hardly applied to economics — productivity, or how does someone know this is a good lawyer or accountant?”
Early results on poverty and inequality are promising — but one day it could be even bigger than that. Perhaps it could give us a deeper understanding of some of the most destructive tendencies in human society.
“People fall out with each other, they are hostile to out-groups, they go to war,” Halpern says.
“The average cost of a war is $100 billion. There is potential in using BI to understand the grounds of conflict. There are so many massive challenges we have yet to apply nuanced behavioural models to.”