BETA Behavioural Economics Workshop
BETA Behavioural Economics Workshop
Department of the Prime Minister and Cabinet
On 25 November, BETA brought together 50 experts from across academia, government, and other sectors for a workshop in Canberra to discuss behavioural economics and its role in improving policy.
The day-long agenda was packed with quality presentations about the latest behavioural economics research and key policy challenges facing Australia; including presentations from behavioural economics pioneers such as Professor Robert Slonim from the University of Sydney, Dr Rory Gallagher from the UK Behavioural Insights Team; and senior Government Executives such as Dr David Gruen from the Department of the Prime Minister and Cabinet.
From the discussions it’s clear that we’re at a promising time for the application of behavioural economics research to policy. A range of studies described by Professor Slonim highlighted key aspects of research that are useful to policy. In one study, Slonim found that giving a small gift such as a pen when making a request for blood donations increased the chances of a person making a donation; this is a behavioural insight widely known as reciprocity. However, when cost effectiveness was taken into account, Slonim recommended against adopting the practice as a policy. In another study involving a donor registry, the effect yielded a 50% enhancement in cost-effectiveness (even a year later) and the program was strongly supported by Slonim and his team. Importantly, the generalisability of these findings may also extend to other policy areas such as volunteering and charitable giving. Another powerful point made by Professor Slonim highlighted that behavioural economics differs fundamentally from other behaviourally based disciplines, such as marketing, because of its imperative to consider system wide effects when it is applied to policy.
There were many important topics that appeared throughout the day. At the heart of behavioural economics, we focus on how individuals make choices, and in government we consider how policies might help people make choices that align with their best intentions. But the levers to affecting this architecture often lie in areas that Government doesn’t directly control, for example at a level above the individual are the market forces of the private sector. Identifying the best way to partner with such organisations and test policies which may lead to potential changes in regulation was seen as important. Similarly, ensuring that we go beneath the social and psychological factors affecting individual choices to consider the neurological basis of decisions was recognised as important. Professor Peter Bossaerts of the University of Melbourne highlighted in his presentation, for example, that there were biological markers of good financial decisions and that a better understanding and incorporation of this in policy could help support decisions ranging from gambling to saving for retirement. A presentation by Dr Ralph Lattimore based on the Productivity Commission’s report on problem gambling highlighted the intersection of many of these factors.
Overall, there was broad agreement that there are many good opportunities for government and academia to work together to improve policy. Each group needs to continue reaching out to the other and signpost their needs. BETA is determined to ensure this happens. We are grateful to all the attendees and presenters of the workshop who helped kick start our mission towards further engagement.
See the presentations by our keynote speaker Professor Robert Slonim and from the panel on experimentation in policy making.
- Behavioural Economics, RCTs and Policy: Improving Blood Supply by Professor Robert Slonim, The University of Sydney [PDF 1.4 MB]
- Behavioural Economics and Policy by Dr Ralph Lattimore, Productivity Commission [PDF 556 KB]
- Applying BI in Education: A Case Study by Dr Rory Gallagher, The Behavioural Insights Team [PDF 992 KB]
- How Neurobiology Can Inform Decision Science: The Case of Trading Skill by Professor Peter Bossaerts, The University of Melbourne [PDF 1.3 MB]
- Employment Outcomes by Rose Verspaandonk, Department of Employment [PDF 1.2 MB]