How has behavioral economics contributed to public policy, and what are the guiding principles for future work in this area? This was a question that a National Academies of Sciences, Engineering, and Medicine committee recently discussed, researched, and crafted a report on.
The report delves into how behavioral economics has been used in health, retirement benefits, social safety net benefits, climate change, education, and criminal justice, and it considers five core behavioral principles that affect people’s decision-making in these areas: 1) limited attention and cognition, 2) inaccurate beliefs, 3) present bias, 4) reference dependence and framing, and 5) social preferences and social norms.
The report also offers suggestions for how to advance the field such as encouraging more collaboration between behavioral economists and implementation scientists or those trained in public management and more integrated work between policymakers and behavioral scientists so that research ideas can be translated into policy.
CHIBE’s Scientific Director and Penn Professor of Nursing and Health Policy Alison Buttenheim, PhD, MBA, served as co-chair of this committee alongside Robert Moffitt, PhD, the Krieger-Eisenhower Professor of Economics at Johns Hopkins University. CHIBE Director Kevin Volpp, MD, PhD, also served as a committee member.
Read CHIBE’s Q&A with Dr. Buttenheim below.
How was your overall experience working with the committee to develop this report?
This was a terrific experience for me as a co-Chair. We had wonderful support as always from the National Academies staff, and the committee membership included scholars from so many different fields. My co-Chair Robert Moffitt and I were particularly proud of the committee’s willingness to engage in robust discussions across different fields, disciplines, and vocabularies.
Why is behavioral economics important when designing public policies?
One of our key findings from the report is that there is very good evidence that the core principles of behavioral economics show up in people’s behavior, and in their responses to interventions designed to change behavior. For example, people really are biased toward the present and away from the future, and the influence of social norms and social networks can be very strong. For that reason, insights from behavioral economics are really helpful when designing public policies. Centering those insights means that policies can be designed taking into account how people actually behave, rather than how policy makers wish they might behave.
The report notes the importance of collaboration between researchers and policymakers. How do you think these two groups can build connections?
The committee agreed that one place this can happen is in graduate and professional training. For public administration and public policy students particularly – the ones who are going to be on the front lines of policy formulation, implementation, and evaluation – getting exposure during training to behavioral economics and to a behaviorally-informed policy process can hopefully pave the way for future collaborations with researchers.
The committee focused on six domains—health, retirement benefits, social safety net benefits, climate change, education, and criminal justice. In which domain do you see behavioral economics being used most effectively, and which one could leverage behavioral economics more?
We had a hard time narrowing our review of the evidence to just six domains, but it was important for us to focus on domains with a range of evidence. It was no surprise that health and retirement benefits both had substantial evidence bases as well as some great policy impact stories. Education and criminal justice were domains where we saw enormous potential for behavioral science but found that the research was still in its infancy. You never like to rely on “more research needed” as a conclusion of this kind of undertaking, but in this case…more research is needed!
In each domain, the committee lists some of the landmark work. For example, in the health domain, the committee cites work related to how financial incentives and loss framing have helped people quit smoking, how 90-day prescriptions rather than 30-day prescriptions help adherence, and how gamification can help with physical activity, etc. Do you think some of these landmark studies are still being underused? And if so, why?
These studies – many of them done at CHIBE! – have been truly influential in designing health behavior change programs, employee wellness programs, and even gym memberships. Where the committee saw room for additional impact, however, were in the areas of precision or tailored nudging, implementation, and scale. Those are really frontier areas where we need to discover new methods and partner with policymakers and program staff to move these research findings into practice.
How do you hope this report is used?
For the research community, I hope it can serve as a useful reckoning of past successes and a roadmap for future research priorities. But I’m even more excited about the potential for the report to get into the hands of policymakers at all levels and in all domains. I hope it sparks some ideas about how to apply a behavioral lens to policy challenges of all kinds and inspires policy teams to partner with behavioral scientists to diagnose behavioral barriers and draw on tools from the behavioral economics toolkits to get the best policy outcomes possible.