Book Review: Inside the Nudge Unit
When Richard Thaler wrote about his journey in establishing the field of Behavioural Economics in “Misbehaving”, he mentioned about how nudging was brought to the UK. In 2008 just after “Nudge” was published in the US, Thaler was invited to share his work with some Members of Parliament (MPs) from the UK Conservative Party (aka the Tories) at the UK Houses of Parliament. It turned out that David Cameron, the future Prime Minister of the UK at that time, was fascinated by Thaler’s book “Nudge”, and wanted to use ideas from the book to make the party more progressive and pro-environment.
Soon after David Cameron became Prime Minister in 2010, Thaler was enlisted to help make the UK government more effective and efficient using Behavioural Economics. From the UK civil service, David Halpern, who was Chief Analyst in the Prime Minister’s Strategy Unit at that time and a social scientist from Cambridge, was selected to lead the effort in building a behavioural sciences unit for the government. On a train ride to Paris to share about behavioural sciences with the French government, Halpern and Thaler decided to name the new unit “Behavioural Insights Team”. But they agreed that no matter what name they chose, everyone will probably still call it the “Nudge Unit”.
And that is the story of how the Nudge Unit of UK came about.
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“Inside the Nudge Unit” is a book written by David Halpern, who is the Chief Executive of the Behavioural Insights Team (BIT), unofficially known as the “Nudge Unit”. BIT was originally set up in 2010 within the UK Cabinet Office, but in 2014, it was privatised by splitting the ownership equally between the UK government, the charity Nesta, and BIT’s employees. Now, BIT is a social purpose organisation that seeks to generate and apply behavioural insights to inform policy, improve public services and deliver results for citizens and society. The unit grew from a 7-person team to having 7 offices in 5 different countries today — UK, US, Canada, Australia, New Zealand and Singapore.
In his book, Halpern briefly describes the history of how nudging found its way into public policy, which eventually gave rise to the creation of BIT. He then talks about the EAST (Easy, Attractive, Social and Timely) framework that BIT uses to design more effective and efficient policies, as well as the “Test, Learn, Adapt” methodology that helps to refine and choose interventions to use. Finally, Halpern voices his views about what are some of the ethical considerations of nudging in public policy, and his belief in what the future holds for the application of behavioural insights.
For this book review, I will explain a little more about the EAST framework and the “Test, Learn, Adapt” methodology, before sharing some of the insights I have gained from reading the book.
EAST Framework
EAST is actually a mnemonic capturing the key principles from years of behavioural science research that BIT uses to design policy interventions. The idea is that by making an intervention easy, attractive, social, and timely, the success of achieving behaviour change will be much higher.
Easy: Making a behaviour easy means simplifying, reducing the hassle, and taking out the friction in the behaviour that we are trying to encourage. It is in fact the very fundamental of nudging. If a task is inconvenient or takes a great amount of effort to even get started, the inertia to simply approach it would already be very high. Consider how most businesses in recent years focus on using smartphone apps to allow customers to access their services as easily as possible — getting a ride, ordering food, on-demand entertainment has never been more convenient.
In terms of using this principle for public policy, I’ve actually mentioned an example in the previous post — having defaults. In cases where people don’t really have a strong preference, introducing a default option can increase the chance of them selecting a choice that has been deemed to be more beneficial. For example, when people are automatically enrolled onto pension schemes (but are allowed to opt out), they are much more likely to end up with a pension plan than if they have to actively opt in, since the inertia to think about retirement planning is often quite high.
However, it is very important to be aware of situations where defaults may be considered politically unacceptable, because some decisions can be quite controversial.
Attractive: Removing the barriers to a desired behaviour is one thing, but if there is competition in the number of easy things to do, the desired behaviour needs to stand out. This can be achieved by making the desired behaviour attractive, one that is able to draw attention and/or make people feel rewarded for performing the behaviour. This is stepping into the territory of businesses and marketers, given their wealth of experience in promotion and advertising. Just walking into a supermarket or browsing through an e-commerce site, we can feel the myriad of products vying for our eyeballs, either through fancy packaging or great deals that we simply cannot afford to miss.
Doing this in public policy is not so different. If we want to people to pause and read an important message, an attractive graphic will have a better chance at “shouting out” to them, or a touch of personalisation could possibly achieve the cocktail party effect.
Alternatively, rewards can be given to people who perform a desired behaviour, either in the form of a lottery, or through the use of gamification. Take Singapore’s Health Promotion Board’s (HPB) National Steps Challenge for example, to encourage citizens to be more active, for every 10,000 steps recorded in the steps challenge mobile app every day, participants are rewarded points that can be used to redeem grocery vouchers. As we know from operant conditioning, these rewards can positively reinforce the desired behaviour of being more active, and HPB’s campaign can also meet its objective.
Social: Now that we’ve made the desired behaviour easy to approach and attractive to accomplish, how do we cement it further? Appealing to the social aspect of a desired behaviour gives people more reason to perform it. People are social creatures that use cues in their social environment to make their judgments. Joining a queue to a restaurant that is supposedly acclaimed, checking out a recommended product on an e-commerce site that others have also viewed, these are social heuristics that we often use to determine whether or not something is of interest to us. (In a previous post, I wrote about the pros and cons of social heuristics.)
One of the most famous examples of using social norms to influence behaviour is Robert Cialdini ‘s work in crafting hotel room messages to encourage guests to reuse their towels. In his study, Cialdini found that when the message was framed as “majority of hotel guests reuse their towels” as compared to the generic “save the environment” pitch, guests were more likely to comply. These findings imply that when crafting messages for public policy, it is not enough to tell people the end result that we want to achieve — we also need to tell them that others are doing their part as well. But of course the message has to reflect the truth, otherwise the effect will backfire terribly.
Timely: Suppose we’ve gotten all the previous three principles right, but the intervention is still not working, what could possibly be wrong? Timing of the intervention would then be key. Policy makers may assume that interventions are equally effective across time, but human behaviour does not work like this — people are more likely to change their behaviour at certain times than others. Just think about how marketers reserve a large chunk of their advertising budget for the holiday season. Since people are more willing to spend just before the holidays, the return on investment during that period is usually the highest. (In a previous post, I wrote about how people are most susceptible to fake news during periods of uncertainty and anxiety.)
The same goes for public policy. It is important to identify the time when an intervention will be most effective, or when people will most likely be receptive. The two are slightly different in the sense that the first could be a case of ensuring that an intervention is executed before it is too late. For example, a campaign to discourage teenagers from smoking would be more successful before smoking habits developed. But for the second type of timing, it is about considering the major moments of change that people experience in their lives. During periods of transition, people are more likely to change their habits and behaviour to accommodate to the new situation, such as how parents are more willing to plan for their finances just before having a child.
While there may never be a guarantee that an intervention would work as planned even if it was well-designed, making it easy, attractive, social, and timely is any policy maker’s best bet of achieving behaviour change.
“Test, Learn, Adapt” Methodology
Because there is no guarantee even with the EAST framework, BIT developed the “Test, Learn, Adapt” methodology to ensure that interventions are well-tested before they are released into the wild. The idea at the core of “Test, Learn, Adapt” is making use of Randomised Controlled Trials (RCTs). RCTs are most commonly used in clinical trials to test the efficacy of medical interventions, and in business settings they are usually known as A/B Testing. BIT believes that RCTs should also be used to test the effectiveness of public policy interventions. By comparing against a randomly assigned control group, it becomes possible to know what would have happened if nothing was changed.
Instead of going into the details, I shall just outline the 9 steps identified by BIT to properly set up an RCT, and leave you to read about the rest in the book:
Test
1. Identify two or more policy interventions to compare.
2. Define the outcome that the policy is intended to influence.
3. Decide on the randomisation unit.
4. Determine how many units are required for robust results.
5. Assign each unit to one of the policy interventions using a robustly random method.
6. Introduce the policy interventions to the assigned groups.
Learn
7. Measure the results and determine the impact of the policy interventions.
Adapt
8. Adapt your policy intervention to reflect your findings.
9. Return to step 1 to continually improve your understanding of what works.
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In many ways, “Inside the Nudge Unit” can be quite a good guidebook for both policy makers and business leaders alike, who are keen on tapping into the insights of behavioural science. The concepts have been neatly organised into separate chapters, and vivid examples are used to illustrate how each concept is being applied in the real world. If one is originally unfamiliar with behavioural science, reading the book will give a pretty good foundation; if one is already familiar with behavioural science, reading the book will help to structure the information in a way that is much easier to retrieve.
Perhaps one of the most valuable advice that Halpern leaves us in the book is about avoiding the God Complex. Many people in top management positions believe that “it is better to be decisive and wrong, than uncertain and right”. But other than preserving one’s ego and giving others a false sense of confidence, such a mentality can actually cause a country or business to lose millions. We can gain a lot more if we learn to have the humility to say “I don’t know, but we can find out”. That way, we will be able to get to the bottom of why something works, or maybe even discover better alternatives.
All in all, I hope that my book reviews of “The Undoing Project”, “Misbehaving” and “Inside the Nudge Unit” have provided a good history and summary of the more prominent topics in behavioural science and decision making, and generated enough interest for you to want to pick them up for a read.
If you would like to know more about Michael Lewis’ “The Undoing Project”, check out this book review:
If you would like to know more about Richard Thaler’s “Misbehaving”, check out this book review:
Originally published at: https://learncuriously.wordpress.com/2020/06/19/book-review-inside-the-nudge-unit
