John Krebs evaluates insights from behavioural science.
How often have you heard politicians talking about people ‘doing the right thing’? How many of us do what we are encouraged to do: eat the right food, drink within the government guidelines, exercise according to official advice, save for our pensions or reduce our environmental footprint in the home, in transport and in buying stuff?
There are three traditional ways in which governments cajole or encourage us to do the right thing. Regulations prevent us from doing the wrong thing such as drinking and driving. There are also fiscal disincentives such as taxes on tobacco, and advertising campaigns such as the anti-drink driving adverts seen around Christmas time.
But in recent years a new approach has become fashionable, based on insights from research into human behaviour, especially by psychologists and behavioural economists.
It is now recognised that humans have two systems of processing information. On the one hand we are reflective, thinking, analytical primates capable of carefully considering information before deciding. On the other hand, many of our day-to-day choices are governed by a much faster, more automatic, reflexive and sub-conscious system.
Think of the scary experience of driving along a familiar route and suddenly realising you have been on auto-pilot for the past few miles, unable to recall exactly how you got from there to here. Daniel Kahnemann describes the two systems, and how the sub-conscious, fast, thinking system can lead us into misjudgements.
There are many biases in our fast thinking system: some very familiar to all of us. For instance we use short cuts when confronted with choices that are complex to handle. Barry Schwartz recounts the challenge of buying a new pair of jeans, with the plethora of cuts, colours, and details. Incapable of working out which are truly the best jeans for us, we satisfice: choose a pair that we are satisfied with.
We also discount into the future and so tend to prefer smaller, immediate rewards than much larger rewards later on: £5 now rather than £100 in a year’s time. We also show ‘ownership bias’, regarding things that we already own as worth more than an equivalent object in a shop.
Influential authors Richard Thaler and Cass Sunstein argue that these behavioural insights could provide a way for governments to persuade us to do the right thing, for instance, by setting up choices in certain ways to guide people through their reflexive thinking system. By making the default for pensions ‘opt in’ rather than ‘out’, more people, without thinking about it, are nudged into paying into a pension.
Since there has to be a default, it may as well be one that is good for people. Thaler and Sunstein argue that this kind of manipulation of people’s behaviour is relatively benign as it does not restrict, but rather guides, choice. This appeals to governments wishing to avoid the ‘nanny state’ badge and leave people to make their own choices. But how wide a range of public policy problems can be solved by insights from behavioural science, in particular insights about our fast system of thinking?
Rewards and punishments
The idea of tapping into our subconscious reflexes for policy is not new. The influential 20th century psychologist BF Skinner wrote a novel about a community in which everyone does the right thing, both for themselves and for the community as a whole, as a result of ‘behavioural engineering’. Skinner recognised that in order to solve many of the world’s major problems, including environmental exploitation and social inequalities, governments needed to change people’s behaviour, but lacked the means of doing so. For Skinner, the answer was to arrange rewards and punishments in such a way as to encourage more of the good behaviours and fewer of the bad. But the more recent insights from behavioural science suggest that rewards and punishments may not be the whole story.
From individual to population
Experts in marketing have for many years successfully exploited the power of insights into our fast thinking system. Robert Cialdini has characterised  what he calls the ‘six weapons of influence’ used in marketing. People may be persuaded to buy something because it is what everyone is doing. I bought an iphone, not because I needed one, but because nearly all my friends had one and I wanted to be like them. Another trick is based on the phenomenon of ‘anchoring’. People often chose the second cheapest wine on the menu, whether it costs £12 or £18: their price tolerance is anchored by the lowest price on offer.
But it is one thing to use our subconscious to persuade us to buy more stuff, or particular brands of stuff, working with the grain of our acquisitive tendencies, and quite another to persuade the population as a whole to do fewer of the things we like, especially when it is for the good of society rather than the individual. Many of the major challenges in public policy involve exactly this: eat less and exercise more, turn down the central heating, walk or cycle instead of driving, save harder for the future and spend less today.
Not only nudges
There are some success stories for public policy, demonstrated by randomised control trials inspired by the UK government’s Behavioural Insights Team or Nudge Unit. For example, sending text messages prompts increases of payment of court fines from five per cent to 20 per cent; subtle changes in the wording of corporation tax demand letters increases payment by three per cent.
However, a 2011 Report by the House of Lords Science and Technology Committee concludes that, for many major policy challenges, behavioural insights on their own are not sufficient.6 The report looked at two case studies: obesity and shift in transport from cars to bikes, foot or public transport. In both, the aim is to change behaviour at the population level. Past experience shows that big shifts of this kind result from a combination of legislation, fiscal incentives, and education and insights from behavioural science. Examples of population changes in behaviour include smoking, where the prevalence has gone down from about 80 per cent to a little over 20 per cent since the middle of the last century; drink-driving; and wearing seat belts. None of these would have happened by nudging alone.
Permission for government
A recent MORI survey of 24 countries showed a surprising degree of support for stronger government intervention including taxing and banning. There is particularly strong support (88 per cent on average) for legislation to restrict companies.
In the case of obesity, food companies have such a powerful role in determining what and how much we eat that the notion of free choice is a mirage. Three measures that might make a difference are taxation of unhealthy food, introduced in 11 countries, stronger restrictions on advertising these foods to children, and clearer labelling of food using multiple traffic lights. The food industry fights hard against restrictions on marketing to children and traffic light labelling, which suggests that they know what an impact these measures would have. Sainsburys is one of the few companies to adopt traffic lights, and Justin King, the Chief Executive, gave the Select Committee examples of dramatic shifts in shoppers’ preferences as a result.
In summary, insights from behavioural science are an important part of the toolkit for getting people to do the right thing, and for some policies they can make a significant difference. But for the most intractable problems, including obesity, the more traditional tools of regulation and taxation will be needed in addition to behavioural insights, if the government is serious about tackling the problem.