Fighting Coronavirus with Behavioural Economics

How can public policy be improved?

Enhancing public policy with behavioural insights to nudge people to follow safety protocol

With all these behavioural biases present, the task of implementing effective public policy, or creating recommendations that will be respected and followed, is daunting, and can seem unachievable. However, behavioural economics studies have produced many tools on which policy makers can rely to help overcome these behavioural biases and ensure maximum compliance with recommendations and promote safe conditions for society. Some of these tools are described below.

Framing

Different choices are made depending on how information is presented. By choosing carefully the wording of guidelines and recommendations, policy makers can induce decisions that align with policy objectives.For example, instead of stating “do not greet your friends with kisses on the cheek,” which sounds negative, restrictive, and controlling, they can frame the recommendation as “greet your friends with an elbow tap,” which offers a positive suggestion, and is more likely to be followed.

Reference points and anchoring

Examples can be used to give a clear “baseline” to help shape peoples’ expectations. People may hear “stay 1 metre apart” but not be able to visualise exactly what that looks like. In order to help with this and create clear expectations, images have been circulated demonstrating how big one metre is, and stickers have been set up one metre apart to help ensure social distancing in queues.

Examples of reference point and anchoring

Salience

People tend focus on the most prominent piece of information given and ignore the rest.Public service announcements should be concise and straightforward, focusing on the most critical recommendations, and repeating them at the beginning and the end of the message. This way, people will remember the main takeaways.

Commitment Devices

A commitment device is a choice made in the present that restricts the future set of options.  Because of inertia, people prefer to stick to the choices they have made. If policy makers can find a way to induce commitment to a certain behaviour now, people will be more likely to follow sick to it in the future as well.

Reminders

Reminders are a tool that force people to recall the decisions they have taken, or the actions that they should take. Reminders can be utilised to reduce cognitive overload, reminding people of past decisions they have taken, and steering them towards the same decision for the future.  Reminders can take the form of signs, public service announcements, mass SMSs, or a host of other things, providing sporadic cues of specific actions to take.

Micro-incentives

Micro-incentives are small rewards or punishments applied based on the actions taken. Small “rewards” such as free hand sanitizer in stores or small gifts added to takeaway orders can help to reinforce public policy measures implemented. Taking away hassle factors can also greatly reduce the perceived costs of following social distancing guidelines; even providing employees with water bottles or hand sanitizer at their desks, versus having them congregate at water coolers or dispensers, can help reduce the spread of coronavirus.

Planning Prompts and Action Plans

Planning prompts and Action Plans break down the steps required for taking certain decisions. By introducing planning prompts, policy makers can clarify broad goals, i.e. “stay at home,” into smaller, more specific actions such as, “work from home, cook at home, and order your groceries,” making the end goal clearer and more attainable, or break a bigger task, “safely dispose of waste,” into its separate components to ensure thorough comprehension and compliance.

Example of a planning prompt and action plan

Descriptive and prescriptive norms

By making explicit the behaviours expected and required to comply with social distancing, policy makers reduce uncertainty and create a new social norm for people to follow. As more people follow these norms, they will become the new status quo, and inertia and reciprocity will perpetuate these behaviours. Influencers and social media have been used to demonstrate these norms and promote safety measures such as wearing masks and staying home.

Defaults

The default action is the automatic option chosen when no decision is taken. Redefining the default action helps to overcome the status quo bias. When people are faced with cognitive overload and don’t make a decision, they will revert to the status quo. In this case, when faced with too many recommendations, people may ignore the recommendations entirely. Public policy makers can induce compliance with regulations by shifting the status quo. By incorporating images of people following social distancing guidelines- for example, wearing masks and standing 1 metre apart in advertisements- policy makers can shift the status quo, and render the default option following these norms. This way, even when faced with cognitive overload, the default option will be to put on a mask and stay away. This ties into social norms, and by shifting the social norm to following protocol, policy makers can promote health and safety. 

Heuristics

Heuristics are simple rules-of-thumb.By offering concise, memorable rules to follow, policy makers further simplify the decision-making process, making compliance even more likely.

Examples of heuristics

Public policy must be construed following a methodological approach that draws on the scientific method, behavioural economics insights, and statistical and econometric analysis. The process can be broken up into five steps:

1. The goal of the public policy must be clearly defined, with explicit reference to the desired behaviour of the public.
2. A thorough analysis of the context, the problem, and cognitive biases that pose challenges must be carried out.
3. Once the problem and the biases are identified, a solution that incorporates tools to help overcome these biases can be construed.
4. The solution selected is then put through testing to evaluate its effects and its effectiveness.
5. The policy can then be implemented. Refer to figure 14 for the breakdown of this process.

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