The Contribution of the UK's Behavioural Insights Team

The Contribution of the UK's Behavioural Insights Team

Simon James
Copyright: © 2015 |Pages: 18
DOI: 10.4018/ijabe.2015040104
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Abstract

The purpose of this paper is to review and evaluate the work of the UK Behavioural Insights Team (BIT) in the light of the growing literature on behavioural economics. The Team was established in 2010 in the Cabinet Office at the centre of government in the UK. The BIT was specifically set up with the aim of helping the government develop and apply lessons from behavioural economics and behavioural science to public policy. A direct link with the behavioural literature took place when the book Nudge by Richard Thaler and Cass Sunstein (2008) became ‘required reading' on a 2008 summer reading list for Conservative Members of Parliament since their views are seemingly consistent with the Conservative Party's tax and welfare policies. For this reason the Behavioural Insights Team is often known as the ‘Nudge Unit'. At the time of writing (May 2014) it has been announced that the unit will be moved outside government to continue its work, though government (and others) can continue to use its services. This paper analyses a series of reports published by the BIT and concludes that those on health policy, organ donation and charitable giving used behavioural insights to a considerable extent while two of the reports on financial aspects did so to a lesser extent and another one on financial matters hardly at all. It is suggested that some areas may have more potential than others for the application of behavioural insights but that such potential also exists with respect to financial behaviour.
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2. An Economic Case For Influencing Consumer Decisions

Behavioural arguments have long been recognised as providing possible justification for influencing consumer decisions. For example, Pigou suggested that individuals may have a defective ‘telescopic faculty’ and that:

There is wide agreement that the State should protect the interests of the future in some degree against the effects of our irrational discounting and of our preference for ourselves over our descendants (Pigou, 1932, I, II, 7).

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