Behavioural economics in practice Anna Bird Behavioural Insights

Behavioural economics in practice Anna Bird © Behavioural Insights ltd

What is behavioural economics? How can behavioural economics help me study? © Behavioural Insights ltd

Introducing BIT GCSE results were worse than expected in 2002, 2004 and 2006, particularly for boys Why? Applying behavioural insights Working with us © Behavioural Insights ltd

Introducing BIT Hands up Applying behavioural insights Working with us © Behavioural Insights ltd

Introducing BIT 2 x 6=? Applying behavioural insights Working with us © Behavioural Insights ltd

Introducing BIT Hands up Applying behavioural insights Working with us © Behavioural Insights ltd

Introducing BIT 24 x 17 = ? Applying behavioural insights Working with us © Behavioural Insights ltd

Introducing BIT Feel the difference? Applying behavioural insights © Behavioural Insights ltd

Kahneman and Tversky (1981) “Imagine that the U. S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative solutions have been proposed. Assume the exact scientific estimate of the consequences are as follows…” Problem 1 If Program A is adopted, 200 people will be saved. If Program B is adopted, there is 1/3 probability that 600 people will be saved, and 2/3 probability that no people will be saved. © Behavioural Insights ltd

Kahneman and Tversky (1981) “Imagine that the U. S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimate of the consequences of the programs are as follows…” Problem 2 If Program C is adopted, 400 people will die. If Program D is adopted there is 1/3 probability that nobody will die, and 2/3 probability that 600 people will die. © Behavioural Insights ltd

Kahneman and Tversky (1981) “Imagine that the U. S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimate of the consequences of the programs are as follows…” Problem 2 Problem 1 If Program A is adopted, 200 people will be saved. If Program B is adopted, there is 1/3 probability that 600 people will be saved, and 2/3 probability that no people will be saved. 72 % 28 % A B If Program C is adopted, 400 people will die. If Program D is adopted there is 1/3 probability that nobody will die, and 2/3 probability that 600 people will die. Preference Reversal 22 % C 78 % D © Behavioural Insights ltd

A framework for human behaviour and decision making System 1 System 2 Fast, instinctive, effortless, heuristics Slow, considered, hard, deep thinking 2 x 6 24 x 17 Daily commute Travelling overseas Prone to biases Less prone to biases Daniel Kahneman, Nobel Laureate © Behavioural Insights ltd

From Number 10 to… well, everywhere “Our government will find intelligent ways to encourage, support and enable people to make better choices for themselves. ” 2010 2012 -13 2014 2015 2016 © Behavioural Insights ltd

EASY ATTRACTIVE TIMELY SOCIAL © Behavioural Insights ltd

How can we encourage people to save for retirement? © Behavioural Insights ltd

… just make it easy Large employers Medium employers 22 percentage point increase 32 percentage point increase 61% 44% Before auto-enrolment 83% 76% After auto-enrolment © Behavioural Insights ltd

How do you get investment bankers to donate a day’s salary? © Behavioural Insights ltd

Proportion giving away a day’s salary to charity 17% 11% 12% Sweets Personal email 5% Control group Sweets + Personal email © Behavioural Insights ltd

How can we encourage high achieving pupils at underrepresented schools to apply to more competitive universities? © Behavioural Insights ltd

Attractive, Social and Timely “Back in 2009, I was in exactly the same position as you… I came to realise that people with grades like you and me are in high demand from very prestigious universities. ” Ben Cole, University of Bristol © Behavioural Insights ltd

Proportion accepting offers 11. 4% * 8. 5% Control ***: p < 0. 001 **: p< 0. 01 *: p < 0. 05 +: p < 0. 1 Letter to home + school © Behavioural Insights ltd

BIT Questions? Introducing Applying behavioural insights Working with us © Behavioural Insights ltd

What is behavioural science? How can behavioural science help me study? © Behavioural Insights ltd

Introducing BIT Between 2001 and 2009, GCSE results were worse than expected in 2002, 2004 and 2006, particularly for boys Why? Applying behavioural insights Working with us © Behavioural Insights ltd

Psychosocial v intellectual maturity © Behavioural Insights ltd

How can we help parents to support your learning? © Behavioural Insights ltd

Timely info makes parenting easy (well, easier) What homework do you have this weekend? Not much, couple of small things. Usual really. So, your maths test on Friday. . . What do we need to do to get you prepared? © Behavioural Insights ltd

Small but highly cost effective gain • Texts improved by grades by equivalent of one month of teaching… …cost only half a day © Behavioural Insights ltd

BIT Study Tips Introducing 1. Be honest with your parents. Other adults too Applying behavioural insights Working with us © Behavioural Insights ltd

BIT Study Tips Introducing 2. Plan every hour of every day. Update as needed Applying behavioural insights © Behavioural Insights ltd

BIT Study Tips Introducing 3. Study blocks (at least 60 mins), no internet or phone, then go for a walk Applying behavioural insights © Behavioural Insights ltd

BIT Study Tips Introducing 4. At stressful times, remember who you are Applying behavioural insights Working with us © Behavioural Insights ltd