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Behavioural Insights
Context:
The 21st century’s economic models, often based on the idea of Homo economicus—a perfectly rational decision-maker—fail to reflect the complexities of human behaviour.
Introduction:
- Homo economicus: Economic theories often assume individuals are perfectly rational and utility-maximising.
- In reality, humans are only partly rational, and decisions are influenced by psychological, cultural, and socioeconomic factors.
- Behavioural economics: An interdisciplinary field combining psychology, neuroscience, sociology, anthropology, and political science to understand decision-making and psychological influences on economic behaviour.
Key Concepts in Behavioural Economics:
- Heuristics and Mental Models: Rules of thumb and mental models aid faster decision-making in complex situations but can lead to suboptimal outcomes.
- Nudges: Coined by Richard Thaler, nudges are subtle changes in choice architecture that influence behaviour without restricting freedom or changing incentives.
- In Chicago, painting road stripes closer together near sharp turns created the illusion of speeding, reducing accidents by 36%.
- In Brazil, soap operas with strong female characters helped reduce fertility rates by 11% by encouraging women to pursue education.
Behavioural Economics in Public Health:
- In India, where health-related behavioural challenges often stem from human tendencies rather than medical issues, behavioural insights are being applied to improve public health outcomes.
- A classic example of Hyperbolic Discounting, a cognitive bias, is the failure to prioritise long-term health benefits over immediate pleasures, such as in the case of smoking or neglecting preventive care.
- Examples of Successful Public Health Nudges:
- In Madhya Pradesh, scratchable calendars helped encourage pregnant women to take iron-folic acid tablets daily.
- In Maharashtra, glitter was used to show children the spread of germs, leading to better handwashing practices.
- COVID-19: Ludo King’s “mask mode” and digital ads increased safe COVID behaviour intentions by 27.5%.
Behavioural Insights in India:
- The NITI Aayog established Behavioral Insights Units (BIUs) in India to implement evidence-based, behaviorally informed solutions to public health challenges, particularly in low-resource settings.
- These initiatives target both demand-side barriers—such as misinformation or lack of motivation—and supply-side challenges like inadequate infrastructure.
- Despite progress, many centrally funded schemes primarily focus on Information, Education, and Communication (IEC) strategies.
- Behavioural insights should be integrated earlier in the policy-making process to address biases and improve the implementation of schemes such as those targeting widow pensions or iron-folic acid tablet distribution.
- Similarly, while regional behavioural interventions have shown promise, expanding these efforts to state and national levels could address challenges at a broader scale.
- India can learn from successful international case studies such as the success of Spain and the US in using behavioural insights to increase organ donation rates, demonstrate the potential of public-private collaborations in advancing behavioural science for public good.
Challenges and Future Directions:
- Cultural Sensitivity and Inclusivity: Interventions must align with societal norms and values to be accepted. Policymakers must also ensure they do not marginalise vulnerable groups.
- Ethical Concerns: Nudging raises questions about individual autonomy and consent. Policymakers must ensure transparency and safeguard choices to avoid manipulation.
- Sustainability: Nudges may lose their impact over time. Continuous monitoring and evaluation are necessary to ensure long-term effectiveness and adapt to evolving circumstances.
- Multi-Domain Utilisation: The Community-Led Total Sanitation project in India demonstrated that combining behavioural strategies with infrastructural improvements (such as subsidies for toilet construction) led to more significant changes in behaviour.
