Quotulatiousness

February 11, 2012

Tim Harford discusses Nudge-ology

Filed under: Britain, Government — Tags: , , , — Nicholas @ 11:16

Yes, I committed a neologism in the headline. It’s Saturday morning, and I’m too lazy to think up a better headline. Perhaps I need a nudge:

I hear the Nudge unit is in the news again …

I am waiting for the government to establish a Dig in the Ribs unit. Maybe even a Slap and Tickle unit, who knows?

Don’t be silly. Remind me what Nudge is again?

It started as a concept, “libertarian paternalism”, advanced by two American academics, Richard Thaler and Cass Sunstein. The idea was that the government could help people to help themselves without violating their liberty — for instance, by assuming they would like to make pension contributions unless otherwise stated. Then it became a book and the concept got a bit broader and a bit vaguer and more generally about the use of psychology and behavioural economics in policymaking. Then “Nudge” became a fashionable label to be slapped on any policy in search of a headline. Finally, David Cameron set up the Behavioural Insight Team — aka the Nudge unit — to do more research on the subject. The Cabinet Office published some of their findings this week.

[. . .]

For example?

Let’s say somebody has been fined in court but has not paid. You could send in the bailiffs. Or you could send a text message explaining that if the fine isn’t paid quickly, the bailiffs will be on their way. The Behavioural Insight team and the courts service ran a randomised trial, sending no text message to some people and a variety of text messages to others to see which approach works best. It turns out that text messages are highly effective and even more effective is a text message that mentions the miscreant’s name. The difference between no message and a personalised message is that instead of one in 20 people immediately paying up, one in three people do. That adds up to 150,000 occasions on which the bailiffs need not be called in.

This doesn’t sound like rocket science …

No, and it’s not brain surgery either. But it does appear to work. Sometimes these effects are mind-numbingly obvious. For instance, a letter sent by HM Revenue and Customs to chase up tax from doctors was vastly more effective after being written in a straightforward way with the key messages and request for action at the top of the letter. It was just as effective as an alternative that shoehorned in many fancy behavioural insights.

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