Wednesday 16 November 2016

Go on, Go on, Go on.

Some books just hit the shelves at the right time to be successful and others are just slow-burners that may take years or even decades to come to the attention of the public.

A book, clumsily entitled "Nudge: Improving Decisions About Health, Wealth and Happiness" by joint authors Cass R Sunstein and Richard H Thaler", first published in 2008, hit the ground running soon being referred to by economists and even a Prime Minister as an influential work .

It was on the subject of behavioural psychology and specifically in relation to the nuts and bolts of what the policy makers are always striving to achieve- to make people pay their taxes, look after their health, keep safe and all manner of things contributing to a smoothly run and equitable nation.

A newspaper article on this trend-setting book  summed it up nicely.

Behavioural economists have found that all sorts of psychological or neurological biases cause people to make choices that seem contrary to their best interests. The idea of nudging is based on research that shows it is possible to steer people towards better decisions by presenting choices in different ways.

The Conservative Government in the UK formed what was referred to as "The Nudge Unit" on the back of the Sunstein and Thaler book .

It ran dozens of experiments and the early results were promising. In one trial, a letter sent to non-payers of vehicle excise taxes was changed to use plainer English, along the line of “pay your tax or lose your car”. This tweak in the amended letter doubled the number of people paying the tax. In some cases the letter was further personalised by including a photo of the car in question. If the response to the first approach had been good then the photo proved fantastically effective and payments tripled.

Reminders, usually a bit overbearing and bordering on the threatening,  sent out by the Inland Revenue to try to recoup the billions in unpaid income tax were persistently unsuccessful until the application of "nudge theory". An extra sentence indicating that by not paying your dues you could lose out on the NHS and other great British Institutions or alternatively a mention that your neighbours were already fully paid up really made a difference and the tax flow into the Treasury increased significantly.

Subtle changes in the use of words have had amazing effects elsewhere, too. A study into the teaching of technical drawing in schools found that if the subject was called “geometry” boys did better, but if it was called “drawing” girls did equally well or better.

Another set of trials in Britain focused on energy efficiency. Research into why people did not take up financial incentives to reduce energy consumption by insulating their homes found one possibility was the hassle of clearing out the personal belongings, stored items and junk from the attic. A nudge was designed whereby insulation firms would offer to clear the loft, dispose of unwanted items and return the rest after insulating it. This example of what behavioural economists call “goal substitution”—replacing lower energy use with cleaning out the attic—led to a threefold increase in take-up of an insulation grant.

There is no sure fire way to determine whether a nudge will work.

In one trial, green arrows pointing to stairs were put next to railway-station escalators, in the hope of encouraging people to take the healthier option. This had almost no effect. Another experiment had a series of green footprints leading to rubbish bins. These signs reduced littering by 46% during a controlled experiment in which wrapped sweets were handed out.

Differences in culture can have a big impact, too.

“Nudge” described an example in America, where telling high users of energy how their consumption compared with that of their neighbours prompted them to use less.

Bigger tests of nudge theory are being devised regularly. Organ donation is one area. One initiative required members of the public to make a decision on whether to donate at the time of applying for a driving licence. This provided motivation to overcome an inclination to put off making unpleasant choices.

Nudges can however backfire tremendously.

A very early nudge policy in the United States saw teenagers, displaying early but not drastic delinquency, being made to visit hardened inmates in tough prisons who told it straight about their crimes and punishment, often in a very scary and intimidating way. In a follow up to the programme some years later , those who it had been hoped would turn away from a criminal path were actually more likely to be involved in such an anti-social lifestyle.

Similarly, with the anti-smoking warnings on cigarette packets. After research it was found that those who said they were most shocked by the more graphic images of carcinogenic organs were also those who most craved a smoke after seeing them.

To some extent nudges are a bit like a Jiminy Cricket character, that inner voice of conscience that tells us what we should do as the right thing.

It is however an aspect of human nature to just try and get away with not doing something we don't want to do for as long as we possibly can.

(Source; The Economist 2012)

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