Nudge of the Month

App(lication)s of Behavioral Economics

By Francesco Amighetti and Beatrice Del Frate

The core principle that is at the heart of the nudge theory is that “change comes not from the inside, but the outside”, as clearly expressed by Dan Ariely – professor of psychology and behavioral economics and director of the Center for Advanced Hindsight at Duke University. For this reason, the great majority of nudge interventions consists in the re-shaping of the environment where crucial choices have to take place. 

However, as the world and technology are constantly developing, so are the ways of implementing nudges. In days where everyone owns a smartphone and constantly uses it, a new and functional possibility to nudge without having to impact the outer environment comes precisely from smartphone apps. In fact, a large number of apps are nowadays being developed with insights from Behavioral Science, which contribute to make the apps we use smarter and more useful. These apps, in turn, help us behave in a smarter way in different aspects of our lives. 

Two interesting examples concern the issues of following medical therapies more closely and saving more money. In both cases, choices are bound to our innate cognitive limitation in dealing with intertemporal choices, which makes it difficult for us to follow a greater goal in the future at the expense of a smaller but instant reward. Let’s see how apps can tackle  this issue.

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A health-saving app: Wellth

According to the World Health Organization, patient nonadherence to therapy is a worldwide problem that should be taken seriously into consideration. 45% of the US population suffer from chronic pathologies and in developed countries only 50% of those patients take the medication they have been prescribed. Nonadherence is a costly issue: in the US it is estimated to cause 125.000 deaths every year and a national cash outflow of $289 billion.

While pervasiveness of technology and its user-friendliness are often exploited to improve healthcare services and their outcomes, behavioural economics innovations have been introduced only recently to tackle these problems. Wellth, a start-up based in Brooklyn, is a smartphone app that highlighted the opportunities coming from the connection between these two concepts.

Designed especially for heart attack post-discharge adherence, daily weight monitoring, diabetes care-plans adherence, and lung diseases self-management, Wellth combines technology with behavioural economics, leveraging financial loss incentives in order to change patients’ behaviour.

How does it work? The hospital deposits $150 into your account as soon as you start to follow your medication plan. Every day for 3 months, Wellth sends you reminders and monitors your adherence using the camera (e.g. taking a snap of you taking the pills). Any time you do not comply with the plan, you lose $2 per day.

In spite of appearing trivial at first glance, it brings consistent results: developers claimed that it is possible to obtain a 40% or better reduction to readmissions through the app, leading to higher-level patient satisfaction and greater cost savings for both patients and healthcare companies.

 

Wellth

 

A money-saving app: Qapital

Everyone wants to save money. But, everyone also finds it almost impossible to do so. Qapital is a Swedish startup that has developed an interesting app for this reason, with the investment and counseling of professor Ariely himself.

How does it work? The idea behind the app is simple: make something difficult easy and fun. More precisely, Qapital makes you save “just by doing the things you do”. In practice, this means that the act of saving is transferred into daily activities.

It all starts with setting a goal and the money needed for it, as a way to keep motivated. Afterwards, the app – which is connected with users’ credit cards – makes you set saving rules: mechanisms that allow the app itself to keep and save a set amount of money whenever performing a given action. For example, the “round up rule” saves 75 cents for every $2.25 spent for a bus ticket; the “spend less rule” asks you to spend less than $20 at Starbucks per week and keeps the rest as saving; the “guilty pleasure rule” holds extra money back whenever food is ordered online; and so on. Of course, rules are customizable in order to adjust to everyone’s daily habits and routine.

In practice, what Qapital does is nudging to break down a large saving into smaller day by day savings. In this way, it tackles the problem of intertemporal choice by making the goal closer and more achievable. It also reshapes the psychological perception of the act of saving itself, which goes from being an effort that requires great self-control to being something within everyone’s reach. 

Quapital

Sources:

https://wellthapp.com/home

https://www.nytimes.com/2017/04/13/upshot/answer-to-better-health-care-behavioral-economics.html

https://aha-365.ascendeventmedia.com/2016/epost2/technology-helping-to-advance-treatment-of-patients/

http://www.who.int/chp/knowledge/publications/adherence_report/en/

https://www.theatlantic.com/business/archive/2015/11/savings-app-behavioral-economist/414522/

https://www.qapital.com/

 

 

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Nudge of the Month

Good Resolutions and How to Keep Them

By Beatrice Del Frate and Francesco Amighetti

Christmas holidays represent a good moment to spend time with family and friends and to escape from routine. After majestic meals and never-ending celebrations, the onset of the new year is always accompanied by a list of desires, very likely the ones we had the previous year. Probably one of the most common wishes is to finally obtain that so much desired beach-body.

Obviously, immediate solutions might be to have a gym membership or to go to the swimming pool. Nevertheless, if you are starting from a period of prolonged inactivity, it may be better for you to begin with smaller steps…literally! A common suggestion for maintaining resolutions is to decompose bigger goals into smaller sets of sub-goals that are easier to achieve. To maintain the goal of becoming more active in the next year (and hopefully lose weight in the process), it may be helpful to keep in mind that there are also smaller and simpler gestures that can have a huge physical impact in the long run: this is the case of taking stairs whenever there is the chance.

Jan1

Luckily for us, nudges can help do this without much thinking. Stairs nudging is one of the most famous nudge cases: it is simple to implement and monitor and it has a high degree of effectiveness. Principally, stairs are made more attractive through bright colours and visual signals, and/or through motivational quotes and messages (like the calories burned for each step). Here are some creative and smart examples.

Catching the underground?

Redesigning of stairs in metro station is one of the most common and fun ways to implement this kind of nudge, usually done by city associations or temporary sponsors.

For example, in Lyon, in 2016, Pep’s association monitored a  350% increase in the number of stairs users simply by making metro station stairs more captivating. They used a colourful floral design and a simple but clear message: “Your good health is at the end of this staircase”. Furthermore, what they experienced is that people reported a higher intention to take the stairs again if confronted with the same choice in the future.

Jan2

During the same year in Hamburg the stairs of the metro station have been painted like an athletics red track, in order to publicize the Hamburg 2024 Marathon and consequently to incentivize the use of the stairs by travellers. Unfortunately, in this case no data have been collected, but given results from previous studies, it is likely to have been effective.

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Or catching a flight?

A very recent study conducted by Dr. J. Bellettiere and colleagues, published in December 2017, tested the effectiveness of stair nudges in a different context: San Diego International Airport.

For 22 days, the team introduced five signs with different messages at the starting point of the stairs and the escalators. The messages were the following: “Please reserve the escalator for those who need it.”, “Don’t lose time, lose weight. Use the Stairs.”, “Don’t waste Time, trim your Waistline. Use the Stairs.”, “You’ll get more stares if you use the stairs.”, and “If you want to feel younger, act younger. Step it up! Use the stairs.”. The messages were alternated for ten days, and between each a “no sign day” was added as control. Moreover, the subjects were stopped and asked to fill in a survey about their physical habits.

Jan4

The results showed that the signs doubled the number of people that decided to take the stairs (despite carrying luggage!). These included not only regular exercisers but also non-regular exercisers and – most importantly – non-exercisers.

These results taken together emphasize the efficacy of motivational signs in nudging people by reminding them their core values and goals.  

Sources:

https://www.linkedin.com/pulse/nudge-stairs-experiment-urban-design-lyon-subway-nicolas-fieulaine/

http://www.filedier.nl/ov/via-de-atletiekbaan-naar-de-metro/

https://www.psychologytoday.com/blog/changepower/201711/take-the-stairs-in-busy-airport-you-will-if-you-see

https://link.springer.com/article/10.1007%2Fs10935-017-0491-6

Nudge of the Month

Espresso…What else?

Just start with few questions for coffee-addicted people: how many coffees do you take per day and how much sugar do you usually consume per coffee?

We all know that the world divides into two types of people: those who like their coffee natural, and those who like it sweet (sometimes very sweet).

Coffee

If you happen to be in the second group, we have bad news for you. According to the WHO, sugar is one of the major causes of several diseases, especially obesity. Given that the limit of sugar that an adult male can ingest is about 50g per day (7-10 teaspoons of sugar), charging your coffee with extra sugar may not be the best choice for your health, especially if you drink more than simply one or two coffees per day.

Changing habits is easier in words than in action, but there is also good news for all sweet coffee lovers: several kinds of nudges have been developed to address the issue, and have the potential to find further applications in the food sector, for our health’s sake. Here are two simple but effective examples.

 

Do you like to take your coffee at the cafeteria?

Coffee2

Have you ever realised that every time you go to the cafeteria taking a coffee, a tea or a cappuccino, automatically you accompany it with one or two sugar bags?

A study conducted in Italy has investigated whether coffee consumers are aware of how much sugar they consume each time they take a break.

The behaviour of two groups of people has been monitored for 6 days – each one before and after reducing the weight of sugar in each packet from 7g to 4g. The research has shown that the reduction in sugar consumed per client is statistically significant.

This means that reducing the weight of sugar does not affect the number of packets clients take, as people tend to pick up a fixed number of packets out of habit.

Or are you just looking for a quick break?

Coffee3

Most of the times, busy students and workers prefer to just grab a coffee at the nearest vending machine. In this case, how often do they actually pay attention to choosing the amount of sugar?

Assuming that students do not change the default amount of sugar that is set by the machine (e.g. leaving the selection to 3 out of 5 units of sugar), a first simple way to reduce sugar consumption may be reducing the default level of sugar from 3 to 2. In this way, increasing sugar would be an active choice, that is likely not to happen. In fact, behavioural scientists have largely shown that people generally have a bias for maintaining the status quo.

A nudge has been hypothesized by Albert Gascon, a participant in a Nudge Competition on edx.org.
It consists of two intelligent strategies tested in a single nudge intervention.

Firstly, the choice of sugar may be put before the choice of the drink; secondly, instead of reporting “more sugar” and “less sugar”, the extremes of the scale may report the options “healthier” and “less healthy”. In this way, consumers are induced to pay more attention to their choice – instead of relying upon the default option – and are nudged towards a better choice through highlighting the consequences of their choices, that are too often not taken into consideration.

 

Sources:

State of mind http://www.stateofmind.it/2017/11/nudge-quantita-zucchero-caffe/

Albert Gascon http://albertgascon.com/behavioral-economics-in-action-be101x-nudge-challenge/

Nudge of the Month

A little encouragement goes a long way

When we think about improving student performance, we usually think of major changes in the education system, improving infrastructure, hiring more qualified teachers, etc. All of which are important of course, but could we be missing something? Perhaps something less costly and easier to implement?

Having someone that supports you in your activities is important. There may be times when you feel demotivated, and you just need someone to be there and check on you.

This is exactly the idea that has been used by the Behavioural Insights Team (BIT) in the new UK in their new trial in the context of education. They looked at students who, at the age of 16, had failed Maths and English exams.

Such students were asked to choose their own “study supporter” (e.g. a friend or a relative) –who was supposed to send them text messages encouraging them to study or revise for the upcoming exams.

Could this really make such a difference, you may ask?

The answer seems to be an unambiguous YES. Students were 27% more likely to pass the exams. It seems like knowing that someone cared about their results helped them find the motivation to work harder!  

 

Source: Forbes article.

Nudge of the Month

Challenging the Broken-Window theory

How can we prevent individuals from urinating in open areas?

In the Nudge TV show “The Power of Habit”, Sille Krukow, a behavioural expert based in Denmark, designed a nudge to help the Copenhagen Central Station. The problem they were faced with was that many men would urinate in hidden corners outside the building, despite the close location of public (and clean) toilets.

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Staff has to clean the area several times a day

According to Ms. Krukow, this phenomenon can be explained by the broken-window theory of policing (Wilson and Kelling, 1982). When individuals observe others misbehaving, they tend to act in the same way, instead of doing the right thing.

The solution adopted in the show was to add a urinal to the area in question and stickers on the sidewalks signaling the direction and distance to the closest WC.

WC stickers.png

Implementation of the WC stickers

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Urinal installed in the most critical zone

Around 500 people had been observed urinating in two corners of the station during the week before the experiment. After the intervention, half of the people did the right thing, i.e. they instantly used the urinal, while the other half started  to urinate on the street, but changed their behaviour once they saw the urinal. This means that the cleaning staff and station customers were saved of 5,000 liters of urine a week!

To learn more about this nudge (and other experiments), you can find the episodes online here.

Nudge of the Month

Nudges and Social Norms

When are nudges most effective? A study by Pelle Guldborg Hansen, founder of the Danish Nudging Network, a non-profit organisation in Copenhagen, suggests that nudges may work only if they are in line with social norms. They tested two potential “social nudges” in partnership with the local government, both using symbols to try to influence choices:

In one trial, green arrows pointing to stairs were put next to railway-station escalators, in the hope of encouraging people to take the healthier option. This had almost no effect.

The other experiment had a series of green footprints leading to rubbish bins. These signs reduced littering by 46% during a controlled experiment in which wrapped sweets were handed out.

footprints

“There are no social norms about taking the stairs but there are about littering,” said Mr Hansen. Hence, perhaps existing social norms must be studied before designing a nudge!

Nudge of the Month

Increasing charitable giving

How can we nudge people to donate to charities? There are many ways to do so, but we would like to share one in particular which is very simple and surprisingly powerful.

It seems that peer effects are an effective tool to change people’s behaviour. We want to do what people like us are doing. If teenagers have friends that smoke, they are very likely to start smoking themselves (and much more likely than if their parents smoke). The same holds for donations – if our colleagues donate, we would like to donate as well.

This is what has been tested by the UK´s Behavioural Insights Team in cooperation with Her Majesty’s Revenue and Customs (HMRC). The HMRC employees in Essex were sent postcards describing the donation efforts of their colleagues and encouraging them to do the same, to see if more people would start donating. However the experiment went even further (and this is where it gets interesting). One group of employees got postcards featuring a picture of the donor in addition to the above information (see Picture 1). An insignificant change, you may think, but 6.4 % of people signed up for the donation scheme in the latter condition, compared to 2.9 % in the no-picture condition.

Donations

Picture 1: Postcard featuring a photo of the donor

Source: The Behavioural Insights Team (2013)

If you want to know more about behavioural insights applied to charitable giving, see The Behavioural Insights Team (2010) and for a further discussion of peer effects (social norms), read Institute for Government & Cabinet Office (2010).

Nudge of the Month

Attractive names of meals for healthier diets of children

Carrots or French fries? Fruit salad or a chocolate bar? These are the dilemmas that children face when choosing their meals in school lunchrooms. From convincing them that veggies will give them superpowers to ominous threats of what will happen to their bodies if they don’t eat healthy, there are few options left unexplored on how to get kids to eat right.

Unsurprisingly, when all else fails, BE swoops in and saves the day. Discarding classical solutions such as information campaigns, it offers a much simpler alternative: make the healthy options more tempting.

How? By changing their names. Several research teams in the US have tried this strategy in various school canteens and they found that making the names “seductive”, catchy or funny can induce children to eat healthier.

choice
Decisions, decisions…

Source: Tes Global Ltd

Hence, instead of offering carrots as “vegetable of the day” or simply “carrots”, call them “X-ray vision carrots” or “twisted citrus-glazed carrots” and you will increase the probability that children will pick them!

For reference, see Wansink et al. (2012) and Turnwald et al. (2017).