With Support from Pershing Square and Alfred P. Sloan Foundations, New Research Finds that Behavioral ‘Nudges’ Offer a Cost-Effective Policy Tool
Governments around the world have increasingly turned to behavioral science to help address various policy problems – new research shows that some of the best-known strategies derived from behavioral science, commonly referred to as ‘nudges,’ may be extremely cost effective. The new study, which examined the cost-effectiveness of nudges and typical intervention strategies like financial incentives side-by-side, found that nudges often yield particularly high returns at a low cost when it comes to boosting retirement savings, college enrollment, energy conservation, and vaccination rates.
The findings are published in Psychological Science, a journal of the Association for Psychological Science.
“The changes in behavior produced by nudges tend be quite cost effective relative to those produced by traditional policy tools – so there is a big opportunity to use nudging more widely in government in conjunction with traditional policy tools,” says Professor Katherine L. Milkman of The Wharton School at the University of Pennsylvania, one of the authors of the new study...