CabinetOffice Behavioural Insights Team

Behavioural insights & public policy

David Halpern

CabinetOffice Behavioural Insights Team

Behavioural insight is one of several new emphases in UK government thinking

Big Society & decentralisation

Well-being

Transparency Behavioural

insights

Deregulation

Cost efficiency

Payment by results

CabinetOffice Behavioural Insights Team

Most policy concerns behaviour

CabinetOffice Behavioural Insights Team

Behavioural insights adds another dimension

1. Regulation

2. Incentives

3. Information

Behavioural Insights

CabinetOffice Behavioural Insights Team

Not entirely new...

CabinetOffice Behavioural Insights Team

Guide for Policymakers

Shows Implications for Policy

Fantastic summary text

A rich and growing literature

“Our government will find intelligent ways to encourage, support and enable people to make better choices for themselves.”

What do we do?

CabinetOffice Behavioural Insights Team

• Advice

• Trials

• Structural policy changes

Three ways of working

To change behaviour, make it: Easy Personal Social Worthwhile Timely

CabinetOffice Behavioural Insights Team Make it easy to insulate

Source: Behavioural Insights Team, 2012

CabinetOffice Behavioural Insights Team Make it easy to insulate

Source: Behavioural Insights Team, 2012

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Baseline Group discount Loft clearance

Loft insulation relative to baseline

CabinetOffice Behavioural Insights Team

Encourage disadvantaged to go to university

34% 33%

42%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Control Group Information Information + AutoSubmission

Impact of application assistance on university enrollment

Source: Bettinger et al, 2011

To change behaviour, make it: Easy Personal Social Worthwhile Timely

CabinetOffice Behavioural Insights Team

Improving DVLA relicensing rates among persistent offenders

CabinetOffice Behavioural Insights Team

Improving DVLA relicensing rates among persistent offenders

11%

22%

33%

0%

10%

20%

30%

40%

Original letter New letter New letter + image

DVLA relicensing rates

CabinetOffice Behavioural Insights Team

Corporate tax and dissonance

We are sure that your company believes in paying its taxes. We are sure that you believe in paying your taxes. We are sure that you believe in businesses paying their taxes. But our records show that your company now owes Corporation Tax. You can resolve this by contacting us now

Hallsworth, HMRC

To change behaviour, make it: Easy Personal Social Worthwhile Timely

CabinetOffice Behavioural Insights Team

Social norms to cut tax debt

Source: Behavioural Insights Team & HMRC, 2011

CabinetOffice Behavioural Insights Team

Social norms to cut tax debt

68% 73% 79% 83%

0%

20%

40%

60%

80%

100%

Control Group National Norm PostcodeNorm

Town Norm

Self Assessment Tax Debt

Source: Behavioural Insights Team & HMRC, 2011

CabinetOffice Behavioural Insights Team

We are profoundly social beings

21 UNCLASSIFIED • LGID: Wellbeing - why bother?

Meta analysis: comparative odds of decreased mortality

Source: Holt-Lundstad et al, 2010

A question....

Generally speaking, do you think other people can be trusted?

CabinetOffice Behavioural Insights Team

Harnessing ‘hidden wealth’ is a key insight

Lund Patient Hotel

The rise of complementary currencies

Singapore Yellow Ribbon program

To change behaviour, make it: Easy Personal Social Worthwhile Timely

CabinetOffice Behavioural Insights Team

Making energy conservation worthwhile

CabinetOffice Behavioural Insights Team

Using lotteries to boost voter registration

32% 34% 35%

0%

10%

20%

30%

40%

Baseline £1000 prize £5000 prize

Voter registration

To change behaviour, make it: Easy Personal Social Worthwhile Timely

CabinetOffice Behavioural Insights Team

When to encourage people to save?

4.6% 6.2%

9.0% 7.8% 5.8% 5.6% 4.5%

6.7% 6.5% 3.4% 2.8%

37.3%

0%

10%

20%

30%

40%Participants Choices of Month in Which to Increase Savings

CabinetOffice Behavioural Insights Team

Encouraging repayment of court fines

CabinetOffice Behavioural Insights Team

Encouraging repayment of court fines

5%

23% 25%

33%

0%

10%

20%

30%

40%

No text Standard text Standard text +amount

Standard text +name

Repayment rates

Source: Behavioural Insights Team & HMCTS, 2012

Conclusions

CabinetOffice Behavioural Insights Team

• Growth & jobs • Red Tape Challenge • Consumers • Health • Energy • Fines and incentives • Social mobility • Crime • Giving

We are applying across policy areas

CabinetOffice Behavioural Insights Team

We even think about happiness

UNCLASSIFIED Source: Deaton (Princeton); in Halpern, 2010

CabinetOffice Behavioural Insights Team

Life satisfaction: 1981- 2007

Ingelhart et al 2008

CabinetOffice Behavioural Insights Team

Many behavioural and social factors affect life satisfaction

BHPS, CO analysis 2011

Rutland

Hartlepool

Blackburn

Wokingham

“David Cameron’s Vanity Project”

Has Steve Hilton's blue-sky thinking finally come good? It was dismissed as a gimmick, but the 'Nudge unit' beloved of the PM's ideas man is bearing fruit Oliver Wright, Wednesday 8th February, 2012

CabinetOffice Behavioural Insights Team

• Low cost and powerful

• Test, Learn, Adapt

• Harness ‘hidden wealth’

• ...and we welcome collaboration

Behavioural approaches...

http://www.cabinetoffice.gov.uk/behavioural-insights-team

Appendix

CabinetOffice Behavioural Insights Team

The structure of BIT

BIT David Halpern (Director) Owain Service (DD) + 6

Advisory Panel Gus O’Donnell Richard Thaler (Chicago) Peter Tufano (Oxford) Theresa Marteau (Cambridge) Peter John (UCL) Maurice Birlotti (UCL) Nick Chater (Warwick) Dan Goldstein (LBS)

Steering Board Sir Jeremy Heywood (Chair)

We continually negotiate with each other ‘what goes’

UNCLASSIFIED 44

National values have become more distinctive – social influence writ large

-40 -20 0 20 40 60 80

Teach kids tolerance

Religosity

Importance of God

Divorce OK

National pride

Abortion OK

Sign petition

Marriage outdated

Social trust

Homosexuality OK

Dislike N of different …

% change in attitute

% change in spread (s.d.)

UNCLASSIFIED Halpern, 2010; WVS; 18 OECD nations

One of the UK ‘traits’ is high crime – and fear

• Perceived likelihood of burglary by burglary victimisation, by country, 2005

46 BURGL05

3.53.02.52.01.51.0.5

FEA

R_B

0550

40

30

20

10

UK

Sw eden

Spain

Portugal

Poland

Netherlands

Lux

Italy

Ireland

Hungary

Greece

Germany

France

Finland

Estonia

Denmark

Belgium

Austria

UNCLASSIFIED Halpern, 2010; ICVS

Social trust (national trends)

0

20

40

60

80

0 20 40 60 80

1981-3

1997

-200

1

Sweden

Mexico

Argentina S.Africa

France

USA

UK

Spain

Japan

IrelandW.Ger

Belgium

Italy

DenmarkNorway

N.IreAustralia

Iceland

S.Kor

Netherlands

Finland

Decreasing

Increasing

Lowtrust

Hightrust

UNCLASSIFIED Source: WVS; Halpern, 2005

Fear more rooted in social trust

48 SOC_TR04

70605040302010

FEA

R_B

0550

40

30

20

10

UK

Sw eden

Spain

Portugal

Poland

Netherlands

Lux

Italy

Ireland

Hungary

Greece

Germany

France

Finland

Estonia

Denmark

Belgium

Austria

Correlation = .7. Note the Danes have a burglary rate

second only to ours

UNCLASSIFIED Halpern, 2010; ICVS

Did you know? Taking the stairs instead of the elevator is a good way to get some exercise. Why not try it?

Did you know? More than 90 percent of the time, people in this building use the stairs instead of the elevator. Why not you?

1.8 percentage point reduction (not significant)

7 percentage point reduction (significant)

Social norms to speed tax repayments

• BIT, 2011

68% 73%

79% 83%

0%

20%

40%

60%

80%

100%Self Assessment Tax Debt

Well-being

Social trust (national trends)

0

20

40

60

80

0 20 40 60 80

1981-3

1997

-200

1

Sweden

Mexico

Argentina S.Africa

France

USA

UK

Spain

Japan

IrelandW.Ger

Belgium

Italy

DenmarkNorway

N.IreAustralia

Iceland

S.Kor

Netherlands

Finland

Decreasing

Increasing

Lowtrust

Hightrust

UNCLASSIFIED Source: WVS; Halpern, 2005

CabinetOffice Behavioural Insights Team

There’s more to life than ‘real economy’

0

200

400

600

800

1000

1200

1400

1961 1983 2001

Sleep

Med, education

Out leisure, shops

Home leisure

Shelter, nutrition

Services (upper)

Services (other)

Manual

Sleep Medical, education

Sport, shopping, travel Home leisure Shelter, nutrition Professional services Other services Manual

We spend on 23% of our waking time in paid work

down 1hr 15min from 1960’s – with clear

evidence of convergence across class

The ‘economy of regard’ is at least big as the ’real

economy’

Source: Data from Geshunny, UK time budget studies; Halpern, 2010

Social networks matter for well-being, as does autonomy and control

UNCLASSIFIED Source: BHPS; Cabinet Office analysis, 2011

Social connection helps to explain important national differences

UNCLASSIFIED Source: Deaton (Princeton); in Halpern, 2010

The Danish formula

56

0

10

20

30

40

50

60

70

80

90

Perc

ent s

ayin

g m

ost i

mpo

rtan

t

Denmark

UK

Bulgaria

Source: Eurobaromenter data, Halpern, 2010

Measuring well-being

• ONS is asking 200,000 Britons:

• - How satisfied are you with your life nowadays? • - How happy did you feel yesterday? • - How anxious did you feel yesterday? • - To what extent do you feel the things you do in

your life • are worthwhile?

57 UNCLASSIFIED

UNCLASSIFIED

Well-being... ‘enable people to make better choices for themselves’...

Mean Life Satisfaction by Industry Sector – ONS 2011/12 (with 95% confidence intervals)

UNCLASSIFIED

ONS data will be representative by LA area...and released on July 24th

• ONS data shows variation in wellbeing by area – between highest 15 and lowest 15 areas

• Regression models show significant variations between regions controlling for other factors

6

6.5

7

7.5

8

8.5

Rutla

nd

Rich

mon

d up

on T

ham

es

Nort

h Yo

rksh

ire

Cum

bria

Win

dsor

and

Mai

denh

ead

Corn

wal

l

East

Rid

ing

of Y

orks

hire

Wes

t Sus

sex

Bath

and

Nor

th E

ast S

omer

set

Pool

e

Ches

hire

Eas

t

New

cast

le u

pon

Tyne

York

Shro

pshi

re

Nort

h So

mer

set

Roch

dale

Thur

rock

Cam

den

King

ston

upo

n T

ham

es

Liver

pool

Luto

n

Brad

ford

Croy

don

Oldh

am

Bark

ing

and

Dage

nham

Hack

ney

Wol

verh

ampt

on

Bren

t

Birm

ingh

am

Tow

er H

amle

ts

Mean Life Satisfaction by Area – ONS 2011/12 (with 95% confidence intervals)

Source: ONS data for April –Sept 2011- Cabinet Office analysis, 2012

CONTROL

INTERVENTION

To change behaviour, make it: Easy Personal Social Worthwhile Timely

Increasing response rates of doctors to notification of tax owed

• BIT, 2011

4%

21%

35% 35%

0%

10%

20%

30%

40%

Generic Letter Letter focused on Simplified Letter Simplified Letter +

Response Rates of Doctors to HMRC Letters

Reducing fraudulent council tax discount claims

• BIT, 2012

22%

28%

25%

0%

10%

20%

30%

Original letter New letter New letter + signature up

Percent of those discontinuing discount

National insurance

Tax exemptions

Independent Financial Advice

0.00.51.01.52.02.53.03.54.04.55.05.5

Baseline Loft Clearance Retail Loft Clearance atcost

Loft insulation relative to baseline

Criminal sanctions

Financial penalties

HMRC campaigns

Building regulations

Insulation saves you money

Energy Performance Certificates

Food regulations

Fruit and veg VAT exemptions

Nutritional information

CabinetOffice Behavioural Insights Team

People would rather save in the future

3.5%

6.5%

9.4%

11.6%

13.6%

0%

2%

4%

6%

8%

10%

12%

14%

16%

1998 1999 2000 2001 2002

Save More Tomorrow Savings Rates

Easy Make it easy! Remove friction, extra steps Defaults Simplify messages

Personal It’s you! Special and personalised Active commitments Ego

Social Other people are doing it...(Social norms) Reciprocity Networks

Worthwhile It’s fun, or of value... Hyperbolic discounting, prospect theory, lotteries Anchoring & framing Affect Expert messengers

Timely When is this relevant? Key moments and channels Priming

CabinetOffice Behavioural Insights Team

Encouraging repayment of court fines

Source: Behavioural Insights Team & HMCTS, 2012