A Nudge Towards Achieving the Sustainable Development Goals
The Importance of Behavioral Economics for Changing Behavior
The Sustainable Development Goals refer to 17 objectives for our future world as set forth by the United Nations. In September 2015, the 194 countries of the UN General Assembly adopted the Sustainable Development Goals as targets for 2030. The aspirational goals include “Good Health and Well-being” (Goal 3), “Affordable and Clean Energy” (Goal 7), and “Responsible Consumption and Production” (Goal 12).
To even begin addressing these goals a coordinated global effort is required. Solutions will come from many disciplines. Those that first come to mind are probably science, economics, engineering, medicine, and politics. I believe that another discipline will also be crucially important: behavioral economics.
What is Behavioral Economics?
Behavioral economics is the study of how psychological, social, cognitive, and emotional factors influence the behaviour of individuals and institutions. Behavioral economics recognizes that your choice of which car to buy is not simply the product of a rational cost-benefit analysis but also relies on things such as your mood, what car your best friend drives, and which metric the salesman used to describe the car’s fuel efficiency.
The observation that human behaviour is influenced by many factors outside of a strict cost-benefit analysis led to the realization that people’s choices could be “nudged” towards certain outcomes. For example, some of my research has found that people tend to prefer more fuel-efficient cars when fuel efficiency is described in terms of “cost per 100,000 miles” compared to alternative metrics such as “gallons per 100 miles”.
How Can We Nudge People?
So, a nudge is an intentional change to some aspect of the physical or psychological environment that moves people’s behaviour in a predictable direction. A key element of a nudge is that it does not forbid choice options, such as banning all fuel inefficient cars from the market. Nor does it change incentives, such as offering a tax-rebate for buying a fuel-efficient car. Ideally, a nudge helps people to achieve personal and societal goals (think: the Sustainable Development Goals).
Three of the most powerful nudges are defaults, social norms, and information framing.
Defaults refer to options that will be selected if no other action is taken. Defaults can be effective nudges because people are often lazy and may believe that the default option is an expert endorsement. Research has found that people choose more climate-friendly electricity when it is set as the default. Other research has found that people use less electricity when lower-than-usual temperature settings are pre-programmed on thermostats.
Social norms refer to informal understandings and rules about how members of a society should and do behave. Information about the behavior of others can be effective nudges because people are social creatures and inherently motivated to fit in and not be seen as deviant. Research has found that including comparison information about a household’s energy use to that of its neighbors reduces above-average household’s energy use. Other research has shown that rewarding below-average energy users with happy smileys helps prevent them from increasing their usage.
Information framing refers to the way that information is expressed including the units and reference point. Information framing can be effective nudges because people are able to understanding and process information more or less easily depending on how it is expressed. Research has found that labels that clearly communicate the lifetime cost savings that can be achieved by choosing energy-efficient appliances increase preference for energy-efficient products. Other research has found that people better appreciate efficiency gains from upgrading their car when fuel economy is expressed as “gallons per 100 miles” compared to “miles per gallon”.
Where Do We Start ?
You might be wondering: How do we begin to address the Sustainable Development Goals? Where will the ideas come from? Who will be the spearhead?
In August 2017, a thousand 18-to-35 year olds from more than 115 countries — entrepreneurs, tech experts, change makers, professionals, and academics — will gather in Denmark for the first UNLEASH innovation lab. The purpose of the nine-day event is to create real, scalable solutions to the Sustainable Development Goals. The best ideas will be funded.
I am honored to be among this pioneering group. I look forward to working with people with diverse backgrounds and experiences but a shared vision of a better future. Most importantly, I am ready to use my knowledge, skills, and experience to nudge the world in a better direction.
I hope you are, too.