Thursday, July 17, 2008

 

Nudge and Influence: the Shape of Things to Come?


Economics is founded on the notion of the rational consumer, weighing up the pros and cons before committing. Not so, say the new behavioural economists, more particularly Richard Thaler and Cass Sunstein whose book is pictured left. According to their view we can all be 'nudged' into making good choices through subtle and benign manipulations of our cultural environment. The idea has already been feted by David Cameron and Barack Obama, not to mention George Osborne too. The latter explains the approach via the Minnesota tax collectors, worried about late tax returns. Instead of issuing exhortations or threats, they merely announced that most Minnesotans had already submitted. The result was a huge self fulfilling upsurge.

This would be, I suppose, the 'peer pressure' nudge but, as Osborne insists, this approach is 'changing the way policymakers think'. The Tories have been in thick with Thaler as well as Robert Cialdini who has written 'Influence: The Psychology of Persuasion'. Osborne suggests energy bills can be reduced by telling consumers how much energy similar homes consume, thus encouraging them to fall into line. Also incentives like paying people to recycle as in parts of the USA:

Where companies such as RecycleBank pay households in more than 500 cities and towns about £20 a month for recycling. They can afford this because of savings they deliver for local authorities in landfill tax bills. This approach has increased recycling by up to 200%, without additional government spending, and turned poorer communities from the worst recyclers to among the best. He also mentions a cooling off period for people signing up for potentially expensive store cards.

While the last two mentioned seem fairly orthodox approaches to me, the first does sound novel and likely to work as we are influenced hugely by the behaviour of others. A little voice nags away at the back of my mind suggesting this is yet another elaborate form of stating obvious commonsense, but such approaches are not necessarily in common currency among policy-makers so one can only welcome a new approach to solving traditional political problems. In an age when changing behaviour will be vital to saving the planet, such innovative attitudes can only be welcomed, even if they originate in the Conservative Party rather than Labour.

Comments:
Such initiatives may only work through novelty value (like the much lauded Dutch experiment of removing road markings) and thus bring short term benefits at best. See also the many studies that show you can improve office workers’ productivity by implementing almost any solution - it’s the being noticed that works - but again alas only in the short term.

Also how do Tories propose to pay us for recycling without the twin evils (in their eyes anyway) of (a) increased bureaucracy and (b) snooping on our bins?!
 
Hughesey
In Germany you can receive payment for some recycled stuff at local centres but it depends on what it is as it's the onward value which determines this.
 
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