Index: Designing for Behavior Change

The Living Library Index – inspired by the Harper’s Index – provides important statistics and highlights global trends in governance innovation. This installment focuses on designing for behavior change and was originally published in 2014.

• Year the Behavioural Insights or “Nudge” Team was established by David Cameron in the U.K.: 2010
• Amount saved by the U.K. Courts Service a year by sending people owing fines personalized text messages to persuade them to pay promptly since the creation of the Nudge unit: £30m
  • Entire budget for the Behavioural Insights Team: less than £1 million
  • Estimated reduction in bailiff interventions through the use of personalized text reminders: 150,000 fewer interventions annually
• Percentage increase among British residents who paid their taxes on time when they received a letter saying that most citizens in their neighborhood pay their taxes on time: 15%
• Estimated increase in organ-donor registrations in the U.K. if people are asked “If you needed an organ transplant, would you take one?”: 96,000
• Proportion of employees who now have a workplace pension since the U.K. government switched from opt-in to opt-out (illustrating the power of defaults): 83%, 63% before opt-out
• Increase in 401(k) enrollment rates within the U.S. by changing the default from ‘opt in’ to ‘opt out’: from 13% to 80%
• Behavioral studies have shown that consumers overestimate savings from credit cards with no annual fees. Reduction in overall borrowing costs to consumers by requiring card issuers to tell consumers how much it would cost them in fees and interest, under the 2009 CARD Act in the U.S.: 1.7% of average daily balances 
• Many high school students and their families in the U.S. find financial aid forms for college complex and thus delay filling them out. Increase in college enrollment as a result of being helped to complete the FAFSA financial aid form by an H&R tax professional, who then provided immediate estimates of the amount of aid the student was eligible for, and the net tuition cost of four nearby public colleges: 26%
• How much more likely people are to keep accounting records, calculate monthly revenues, and separate their home and business books if given “rules of thumb”-based training with regards to managing their finances, according to a randomized control trial conducted in a bank in the Dominican Republic: 10%
• Elderly Americans are asked to choose from over 40 options when enrolling in Medicaid Part D private drug plans. How many switched plans to save money when they received a letter providing information about three plans that would be cheaper for them: almost double 
  • The amount saved on average per person by switching plans due to this intervention: $150 per year
• Increase in prescriptions to manage cardiac disease when Medicaid enrollees are sent a suite of behavioral nudges such as more salient description of the consequences of remaining untreated and post-it note reminders during an experiment in the U.S.: 78%
• Reduction in street-litter when a trail of green footprints leading to nearby garbage cans is stenciled on the ground during an experiment in Copenhagen, Denmark: 46%
• Reduction in missed National Health Service appointments in the U.K. when patients are asked to fill out their own appointment cards: 18%
  • Reduction in missed appointments when patients are also made aware of the number of people who attend their appointments on time: 31%
  • The cost of non-attendance per year for the National Health Service: £700m 
• How many people in a U.S. experiment chose to ‘downsize’ their meals when asked, regardless of whether they received a discount for the smaller portion: 14-33%
  • Average reduction in calories as a result of downsizing: 200
• Number of households in the U.K. without properly insulated attics, leading to high energy consumption and bills: 40%
  • Result of offering group discounts to motivate households to insulate their attics: no effect
  • Increase in households that agreed to insulate their attics when offered loft-clearing services even though they had to pay for the service: 4.8 fold increase

Sources

• “Applying Behavioural Insights to Organ Donation: preliminary results from a randomised controlled trial,” The Cabinet Office Behavioural Insights Team, December 2013.
• Bennhold, Katrin. “Britain’s Ministry of Nudges,” New York Times, December 2013.
• Darling, Matthew. Datta, Saugato. and Mullainathan, Sendhil. “The Nature of the BEast: What Behavioral Economics Is Not,” The Center for Global Development. October 2013.
• Gyani, Alex. “Applying behavioural insights to public policy.”
• Haynes, Laura, Owain Service, Ben Goldacre, and David Torgerson. “Test, Learn, Adapt:  Developing Public Policy with Randomised Controlled Trials,” The Cabinet Office Behavioural Insights Team, June 2012.
• “H&R Block FAFSA Randomized Experiment,” Coalition for Evidence-Based Policy, February 2011.
• Lunn, Pete. “Regulatory Policy and Behavioural Economics,” OECD Publishing, January 2014.
• “Organ donor registrations: trialling different approaches,” The Cabinet Office Behavioural Insights Team, December 2013.
• Schoar, Antoinette and Datta, Saugato. ‘The Power of Heuristics’. January 2014. Ideas42.
• “UK Cabinet Office ‘nudge’ team to be spun off into private group,” Financial Times, February 2014.
• “Using nudges to improve health: sticking to statins,” Ideas42.
• Schwartz, J., Riis, J., Elbel, B., Ariely, D. (2012), “Inviting consumers to downsize fast-food portions significantly reduces calorie consumption,” Health Affairs, 31, 2399–2407.
• “Simple measures ‘cut NHS missed appointments’,” BBC News Health, 8 March 2012.
• Webster, George. “Is a ‘nudge’ in the right direction all we need to be greener?” CNN, 2012.