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Behavioral economic applications in the assessment, prevention, and psychological treatment of addictions. Behavioral Economics Blog

By 4 Mins Read

Friends of the Behavioral Economics Blog, this week we present the paper “Behavioral Economic applications in the assessment, prevention, and psychological treatment of addictions”, by González-Roz, A.; Secades-Villa, R.; Martínez-Loredo, V. and Fernández-Hermida, J. R. (2020), in which authors try to bring the benefits of using behavioral economics’ methods in the assessment, prevention and psychological treatment of addictions closer to the public.

Addictions is a very important topic that worries psychologists all over the world, due to the severity of their consequences in people’s lives.

As we already know, behavioral economics is a hybrid discipline that combines principles of economics and psychology to explain human behavior, and to clarify how human beings make decisions and what factors influence their preferences.

Besides, behavioral economics is based on the idea that human decisions and choices are made in contexts of limited rationality. Namely, a variety of psychological factors, as emotions or attentional biases, come into play and alter the outcomes predicted.

Bearing this in mind, authors of this paper try to transmit what the benefits of using the behavioral economics’ point of view on assessment, prevention and psychological treatment of addictions.

A quick example of behavioral economics applied to addictions would be the following one.

A person with alcohol use disorder will have a high demand for alcohol at the expense of the personal and economic costs associated with the behavior, such as deterioration of social relationships or losing her/his savings. Thus, increasing the economic and personal price, and the opportunity cost, losing reinforcements, a proportional decrease in demand will be favored.

For instance, it has been observed that higher levels of demand and impulsive decision-making are associated with greater severity of substance addiction, both legal (alcohol or tobacco) and illegal (cannabis or opiates).

A very interesting concept is the called “environmental prevention”. This accurately reflects the application in practice of the behavioral economics’ principles in the field of addictions.

Its aim is to limit the availability of opportunities for unhealthy or risky behaviors, as using drugs or alcohol, or to promote the availability of healthy behaviors.

This would be done by changing the physical, economic or legal context that influence behavior.

Moreover, we all know that substance use prevention programs are more effective when they are accompanied by social and legal norms that decrease social acceptance, supply, and restrict accessibility to these substances.

An example of restriction applied to addictions is seen in Norway. In this country, access to slot machines requires the use of a personal card, which increases the costs associated with gambling.

How? This card gives personal identification, minimum age for gambling, limits on losses, etcetera.

In this way, you still can play, but the costs increase, so it is possible that somebody thinks twice if he/she really wants to use these machines.

Preventive measures linked to behavioral economics also involve increasing the availability (or reducing the costs) of alternatives to drug abuse or other addictions. For instance, alternative leisure programs or volunteering.

Additional measures related to prevention involve the development of campaigns to increase the social costs associated with the use of substances, in particular, alcohol and cannabis, by reducing social acceptance or increasing the stigma.

In this regard, prevention campaigns should be specifically aimed at certain target groups, providing clear, credible and evidence-based information.

Regarding psychological treatment, the principles of behavioral economics have had great influence on the development of treatments aimed at increasing the price of substances.

Motivational interventions that promote awareness of the costs and consequences of alcohol and drug abuse also fit into the assumptions of behavioral economics.

To sum up, the application of behavioral economics in assessment, prevention and psychological treatment of addictions offers many benefits.

It allows us to formulate an explanation of que acquisition, maintenance and abandonment of drug dependencies and other addictive behaviors. In psychological assessment it allows us to characterize profiles of consumers or people at risk of become consumers, etcetera.

When it comes psychological treatment, authors say, we should promote alternative behaviors and focus the use of drugs or other substances as a choice that, eventually, will cost great personal and economic losses.

Authors recommend keeping investigating about behavioral economics’ application in this area because they consider, according to empirical studies, that would be a useful method to improve assessment, prevention and psychological treatment of addictions.

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The use of artificial intelligence and virtual assistants, from a behavioral economics’ perspective. Behavioral Economics Blog

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Friends of the Behavioral Economics Blog, this week we present the paper “Why do people avoid and postpone the use of voice assistants for transactional purposes? A perspective from decision avoidance theory”, by Malodia, S.; Kaur, P.; Ractham, P.; Sakashita, M. and Dhir, A. (2022), in which authors carry out a study to know how evitation and procrastination work related to the use of intelligent virtual assistants. 

Consumers have shown notable interest in adopting voice assistants equipped with artificial intelligence, known as “smart speakers.” An example is Alexa (from Amazon), Siri (from Apple) or OK Google.

The creation of these assistants is expected to redefine the ways consumers interact with businesses and engage in various purchasing activities.

In Japan, in 2018, 3.7 million homes owned voice assistants, and that number is expected to grow 500% by 2024, reaching 22 million.

While the adoption of voice assistants is impressive, most consumers have several fears, concerns, and misconceptions about using them in their daily lives. The most common fears and prejudices are related to security, privacy and various financial risks.

As a result, the actual use of voice assistants remains limited to non-transactional activities, such as searching for information, listening to music, and checking news and weather updates.

In Japan, a recent report suggests that only 17.5% of those who own voice assistants use them for transactional purposes. In addition, more than 60% expressly avoid this type of behavior. But what are the reasons?

In previous literature on consumer behavior, avoidance of any product or service is called “consumer inertia,” while postponement is called “procrastination”. Academics suggest that understanding the underlying factors of avoidance and postponement is just as important as understanding the factors that influence service or product adoption.

Because inertia and postponement can result in missed opportunities for marketing experts, it’s a topic that demands in-depth research. It is important to know the background and consequences of evasion and postponement.

Previous literature on avoidance suggests that cognitive biases and nudges are two important antecedents that reinforce or mitigate the influence of consumer decision avoidance.

It is not known, however, whether nudging techniques are effective in mitigating the negative influence of consumer decision avoidance in the context of transactional use of voice assistants and, if so, how the process works. The question also arises as to whether the push can be counterproductive if it is not implemented correctly.

In 2003, decision avoidance was defined as “a tendency to avoid making a choice, postponing it or looking for an easy way out that does not involve any action or change”. When facing difficult decisions, consumers often go into decision avoidance mode to escape feeling uncomfortable. Decision avoidance theory is based on three psychological measures: inertia or status quo bias, action or omission bias, and delay or deferral of choice. This point is further explained in the original article.

Authors identified context-specific dimensions of inertia and procrastination through a qualitative study involving 29 in-depth interviews. Senior executives (5) who worked with popular voice assistant brands were interviewed, as well as consumers (24) who used these assistants in the last six months.

Consumers were found to be using them through their phones and also through smart speakers, with Amazon being the most popular company.

Consumer interview questions were designed to understand their experiences with and apprehensions about voice assistants.

Authors found that there is a negative association between procrastination of decisions and rejection behavior, which is a significant contribution to the literature on procrastination, as well as literature on rejection behaviors.

Although authors had hypothesized that nudges might help reduce procrastination, the results revealed a significant positive association between both. In addition, support was found for the idea that cognitive biases significantly discourage the use of voice assistants for transactional purposes, as well as for the idea that nudges could significantly improve the intentions to use voice assistants for transactional purposes.

​​If you want to know more about Behavioral Economics and how to apply it to human behavior, take a look to our

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What behavioral changes should be promoted to increase people’s ecological awareness? Behavioral Economics Blog

By 4 Mins Read

Friends of the Behavioral Economics Blog, this week we present the paper “How to Effectively Promote Eco-Friendly Behaviors: Insights from Contextual Behavioral Science”, by Stapleton, A.; McHugh, L. and Karekla, M. (2022), in which authors think about how to promote behaviors that favor the ecological awareness of people and organizations.

Climate change is one of the major concerns of the 21st century for several reasons: it is occurring in the present, its severity is increasing rapidly, and human activity is contributing to this increase. 

Experts comment that, despite scientific consensus on the imminent and permanent effects of climate change, organized action to prevent further damage is, actually, minimal.

This is very interesting, as they suggest that climate change can be effectively reduced and managed through adaptation and mitigation. For humanity to survive and thrive, responses that involve both are necessary: mitigation, to reduce the behaviors that cause climate change; and adaptation, to adjust to the expected irreversible changes. 

In short, climate change is a problem caused by human behavior that can also be solved by human behavior. But to change human behavior in a meaningful and lasting way over time, a scientific understanding of it is needed. 

Contextual Behavioral Science (CBS) is an area of psychology that can help us in this mission. 

CBS draws on evidence to understand human behavior, especially language and cognition, as humans understand the world through their thoughts, experiences and senses. 

According to CBS, to promote practices that help reduce climate change, it is necessary for organizations and companies to examine their practices and improve them. In other words, consumer behavior does not just happen, but occurs in a particular context and is often guided by social reinforcement. 

The CBS proposes some strategies or starting points to improve ecological behaviors. For example, they point out how important it is to establish credibility. 

Messages that promote environmentally friendly behaviors are more likely to be effective when presented by a credible speaker. Credible speakers are those who are perceived by consumers as logical, sincere and knowledgeable. 

Organizations and companies can establish this credibility in a number of ways: either directly (by behaving in a way that people perceive them to be wise and honest) or verbally (by engaging with other organizations that consumers perceive to be credible). 

In addition, good leadership and an ability to manage high quality knowledge are also important to be more likely to support sustainable development corporate practices. 

The importance of the message making sense and increasing consumers’ perceived self-efficacy is also noted. That is, a message is more likely to promote a behavioral change if it appears plausible to the consumer. This means ensuring that the elements of the message are not contradictory to the consumer’s understanding of the world.

The importance of message plausibility has been addressed in the behavioral literature, especially regarding clinical patients’ adherence to their treatments. For example, if the disease and treatment are presented in a clear way and the doctor ensures that the patient fully understands them, there is a greater chance that the treatment will be successfully completed. 

On the other hand, the idea of facilitating the transition of ecological behaviors into habitual and routine behaviors is interesting. 

Establishing pro-environmental habits is the ultimate goal and it should be kept in mind that habits arise from continuous reinforcement until the behavior becomes automatic and cognitively efficient.

Therefore, organizations seeking to promote pro-environmental behaviors must also strive to turn them into habits and thus sustain the changes over the long term. 

In a nutshell, it is vital to combat climate change to establish credibility, incentivize effectively, be consistent, help people realize that they can achieve these changes and also align their motivations with their behavior. 

Some of the most significant gestures to stop climate change are quite simple and others, on the contrary, would involve sacrificing a number of comforts to which we have become accustomed in recent years. 

However, authors believe that, given the severity of the environmental crisis we are experiencing, behavioral change is more than justified if we want to save our planet. 

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Pathological gambling and the Native American population: a brief approach from behavioral economics. Behavioral Economics Club

By 4 Mins Read

Friends of the Behavioral Economics Club, this week we present the paper “Differential Probability Discounting Rates of Gamblers in an American Indian Population” by Schneider, T. D.; Gunville, J. A.; Papa, V. B.; Brucks, M. G.; Daley, C. M.; Martin, L. E. and Jarmolowicz, D. P. (2022), in which authors investigate the differential probability discounting rates of pathological gamblers who are part of the native-american population of the United States.

Pathological gambling is a social problem that has always been present, but it seems that it is becoming more and more serious, due to casinos and bookmakers.

In the United States more than 80% of adults participate in some form of gambling each year. It is a pattern that seems particularly widespread among the native Indian population. For example, in 2021, 77% of white Americans participated in gambling, while the figure reached 80.1% for the Native American population.

These differences become even more notable when we consider those who gamble frequently and/or have gambling addiction problems. Specifically, 9.3% of the white American population is within this group, with 1.8% being the percentage of addicts; regarding the Indian population, 12.6% would gamble frequently and 10.5% meet the diagnostic criteria for pathological gambling.

One of the reasons for the risk of developing a pathological gambling addiction is that many of them live near casinos. For example, there are approximately 540 tribes of native Indians, and more than 240 offer gambling activities, reaching the number of more than 500 casinos.

In a study on Native American teenagers in seventh through twelfth grade, approximately 75% had participated in some kind of gambling that year, a higher percentage than the national average (45-55%).

It is true that there are significant economic benefits when they allow casinos on their land, but it also carries the risk of unintended problems for this population.

Gambling often involves wagering a small amount of money for a chance to win a larger sum of cash. In behavioral economics, these types of tradeoffs are compared through probability discounting tasks. In these tasks, the subjects have to choose between small but guaranteed and safe sums of money, and larger but uncertain sums of money. For example, a subject can choose between receiving $50 or a 95% chance of receiving $100.

In these games, the probability discount rate would appear through a series of mathematical procedures. The lower the value of this rate, the greater the willingness of players to take risks; the opposite occurs when there is an aversion to risk. In other words, these rates would be a numerical way of quantitatively representing the players most prone to risk behaviors.

Some experts are studying the neurobiological processes that drive pathological gambling. One approach, which is further explained in the original article, advocates using MRI to look at changes in blood oxygenation.

In this study, authors combine this last idea with probability discounting tasks in the Native American population, to try to better understand the risk of developing pathological gambling that this population faces.

12 people who played regularly and 12 people who did not, participated as a control group.

They underwent probability discounting tasks while the MRI was performed.

It was shown how the probability discount rates were indeed lower in people addicted to gambling in relation to people in the control group.

The findings suggest that probability discount rates may be a behavioral process underpinning risk-taking seen in problem gambling.

On the other hand, no major neurobiological differences were observed. Authors point out that the size of the sample was small and it might be necessary to carry out an experiment with more groups to delve into the neurobiological differences between the two.

Authors would also suggest studying auditory stimuli to know their impact on neural activity during decision making in gaming environments.

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Relationship between personality and counterproductive behaviors at work. Behavioral Economics Blog

By 4 Mins Read

Friends of the Behavioral Economics Blog, this week we present the paper “The relationship between personality, organizational and interpersonal counterproductive work challenges in industry 4.0” by Szostek, D.; Balcerzak, A. P. and Rogalska, E. (2020), in which authors study whether personality traits are related to counterproductive behaviors at work.

Counterproductive behavior at work is a topic of growing interest, both among behavioral economists and among organizational managers.

This is due to the high costs that these behaviors have for companies and in general, for all types of organizations; in addition to negative social consequences.

To this we must add the importance of the issue due to the role of human resources departments in today’s industry and its challenges.

But what are counterproductive behaviors exactly? In the world of work, they are be understood as a set of acts that, although different, share the characteristics of being volitional and damaging, or having the intention of damaging, organizations and/or the organization’s interested parties, such as clients, co-workers or supervisors.

Behavioral economics and psychology argue that the conditions for counterproductive behaviors are complex and can be divided into organizational situational, non-organizational situational, and individual.

Organizational reasons, as the name suggests, mainly result in negative behaviors directed negatively to the organization. For example, unfair pay, boredom at work, or job dissatisfaction.

Interpersonal reasons lead to behaviors directed at other people, such as an argument between colleagues or a low quality of relationships at work.

The individual reasons can be social, economic, technological, legal, environmental, psychosomatic, demographic… Therefore, they must be analyzed in a specific context, since the results cannot be easily generalized.

A very important factor that could determine the tendency to commit counterproductive behaviors is the personality.

Analyzing the impact it has (if any) and how this relationship is tempered by employee demographics, could help to understand better both personality and counterproductive behaviors. In addition, it could help to find new practical ways to reduce the latter.

Therefore, the authors try to achieve two objectives in this article.

On one hand, determine how employee personality traits affect counterproductive behavior at work.

On the other hand, to determine how the impact of the personality traits of the employees on the counterproductive behavior is moderated by the demographic and professional characteristics of the employees, if there is a relationship between the two concepts.

To do this, a survey was conducted in April 2020. The sample were 454 people included and active in the world of work in the Polish context.

Because there are many models for studying personality and its traits, authors decided to use the five factor model, or Big Five, which is the most scientifically researched and proven model.

This model takes into account the traits of extraversion, conscientiousness, neuroticism, kindness and openness, which were the factors studied.

The results suggested that the strongest predictors of counterproductive behaviors are the factors of kindness and conscientiousness. In the case of kindness, the relationship is positive; in the case of consciousness, negative.

This should come as no surprise, as employees who score higher on consciousness tend to avoid counterproductive behaviors. On the other hand, employees who score higher on kindness, are empathetic and try not to get in conflict, hence neither a negative relationship.

Demographic variables, such as time of employment, and type of work, significantly moderated the relationship between personality traits and counterproductive behaviors.

Furthermore, these results would be consistent with the findings of previous studies mentioned in the article.

One of the limitations of the study is that it is only carried out with Polish population in the context of this country, so the results may not be extrapolated to the rest of the world.

Authors, however, consider that the results obtained may be important for human resources management in the reality of today’s growing role of human resources.

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Are men and women equally influenced by having successful friends? Behavioral Economics Blog

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Friends of the Behavioral Economics Blog, this week we present the paper “Gender differences in competitiveness: friends matter”, by Jorgensen, L. K.; Piovesan, M. and Willadsen, H. (2022), in which authors analyze whether men and women are equally influenced when they are surrounded by successful people and how this affects their competitiveness. 

Gender differences in the world of work are related, among other things, with the attitudes that men and women have towards elements such as, for example, competition. 

According to a 2007 paper by Niederle and Vesterlund, men are twice as likely to consider themselves suitable candidates to compete with others, while for women, the general tendency would be the opposite. 

It appears that individual risk preferences, self-confidence, and beliefs associated with gender stereotypes may be relevant factors that help explain why these differences in competitiveness between the sexes occur. 

Another factor gaining importance with studies in recent years is the network of friends and acquaintances. Recent literature has explored how exposure to groups of women affects other women in male-dominated workplaces. On this idea, it seems that having a feminine network is important for other women. 

Following this line of thought, authors of this article wondered whether a child’s friendships are associated with the development of his or her competitiveness and, specifically, whether and how the sex of these friendships influences them. 

Before explaining what the experiment consisted of, it is useful to give some interesting data of the most important insights from recent related articles. 

For example, in 2003, it was found that as an environment becomes competitive, men seem to increase their performance, while the opposite occurs for women, generally speaking.

In 2007, Niederle and Vesterlund concluded that men compete more, a trend that persists even when risk aversion is controlled. 

In 2015, Sutter and Glätzle-Rützler conducted a study with findings such as that boys and girls are equally willing to compete. However, girls’ performance under incentives is significantly lower than boys’. In addition, this same study comments that boys are much more self-confident. 

In the working world, gender stereotypes associated with a job or task may explain the underrepresentation of women in competitive environments. If women perceive competitiveness as a masculine trait, they may feel pressured to act in contrary ways to meet expectations. 

And regarding the friendships idea we discussed a few lines above, as Booth and Nolen commented in a 2012 study, girls in feminine schools in the UK are 42% more likely to compete compared to girls attending co-educational schools. They argue that when females are in peer groups, they suffer less anxiety when doing group work, are more participative and develop more their career aspirations. 

The experiment conducted by the authors of our article was carried out with 338 children and adolescents aged 7 to 16 years. The children received a box with 120 Lego pieces and were given 3 minutes to build a series of specific constructions. 

In the first stage of the experiment, the children received 1 point for each correct construction. In the second stage, they competed with other children. Then, they had to evaluate their work and, finally, they were shown pictures of a boy and a girl and asked about their performance.

The obtained results were very interesting. It seems that the boys were no more willing to compete compared to the girls in the case of this particular sample. 

However, something caught the attention of the authors. Boys and girls with a higher than average success rate are supposed to be more likely to compete. In the case of the top-performing girls, this was not the case and they were almost 12% less likely than boys to choose to compete. 

Regarding the idea of the network of friends, authors found that girls are more likely to participate in a tournament or competitive activity if one of their friends possesses this personality trait.

Overall, for both girls and boys, a positive association was found between the competitiveness of their friends and classmates and their own competitiveness. 

Authors consider it very interesting to continue investigating these ideas in order to help develop the maximum potential of women and men from an early age, through improving their educational environments.

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The impact of technology on the human decision-making process. Behavioral Economics Club

By 5 Mins Read

Friends of the Behavioral Economics Club, this week we present the paper “The impact of technology on the human decision-making process” by Darioshi, R. and Lahav, E. (2021) in which authors wonder what are the factors that cause biases in the decision-making process due to the use of technologies.

We can’t imagine our day without technology, that is a reality. Our smartphone, laptop or tablet go with us everywhere. And their use influences us more than we think, even to make decisions.

Many companies around the world want to create technologies that will help people to make more informed decisions, for instance, artificial intelligence or virtual reality.

And although technologies may positively influence decision-making, sometimes they breach ethical limits. In fact, there are lots of organizations throughout the world that have already warned about the effects of social networks, to the point, for instance, of biasing elections.

For this reason, authors wonder how technology can benefit or jeopardize the human decision-making process.

Technology is in all phases of the decision-making process. For example, at the data collection stage, due to people using platforms as Google or Wikipedia, or other sources, and this information influences the decision maker in the following decision steps.

Technology helps people filter, analyze, and process information as well as formulate alternatives and evaluate them, whether consciously or unconsciously.

In fact, a mentioned study in this paper, showed that the way products and their prices are displayed on a website can induce people to buy them. Any information, even covert, affects que subconscious.

So, how does technology affect our decision-making process? What biases appear with the use of technology?

For instance, technologies make possible that everybody has access to an infinite amount of information, but we do not know it that information is true and reliable.

 On the other hand, frequent exposure to information can also affect a person’s decision making. The researchers assumed that frequent exposure to information could make people believe in the information. The more frequent the exposure, the more likely it is that a person will be inclined to believe that the information is more evidence based or more reliable.

Simply because when it comes about making a decision, these data are more dominant or accessible in the memory.

Another interesting fact is the so called “digital amnesia”. Is the tendency for people to forget information they can find quickly by using online search engines. A side effect of this phenomenon is that people might believe they are smarter than they really are, since they think information is easily accessible to them.

Moreover, technology can affect to our emotions and generate positive or negative sensations. There are emotions that technologies cannot properly convey. For instance, they were found to suppress a person’s empathy, and this is very negative, since empathy helps people make better decisions for society.

We also know that when emotions participate in the decision-making progress, neutrality can be lost in the process. That is why authors mention the need of not letting technology suppress or manipulate people’s emotions.

Knowing some of the biases that can appear when, consciously or unconsciously we use technology for decision-making, authors propose a model that can assist people in the analysis of specific technologies: whether they can benefit human decision making and bring people closer to the desired normative and rational solution or damage the decision-making process by potentially causing many biases.

The model assumes that awareness of possible decision-making biases contributes greatly to their prevention and can therefore bring the decision maker closer to optimal choice.

There are 7 questions in the model, all of them related to the biases explained in the paper.

Some of the questions are: What is the extent of technology’s involvement in the decision-making process? What is the amount of information, and is it realiable and relevant? What is the extent of emotional manipulation?

Authors want us to be aware that, although technologies can help a person make more intelligent and informed decisions, they also expose a person to many decision-making biases.

A limitation of this study is that this model was examined only theoretically and, therefore, should be tested experimentally under laboratory conditions to see if it really helps people.

Life is full of moments in which we should make decisions. Some will determine wo will live and who will die, some affect one’s financial condition, and some lack influence. But, before each decision is made people should be aware not only of the decision at hand, but also of the environments and technologies that influence it.

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Negative economic shocks at birth and in early childhood: do they affect adolescents’ cognitive and educational development? Behavioral Economics Blog

By 4 Mins Read

Friends of the Behavioral Economics Blog, this week we present the paper “The effects of negative economic shocks at birth on adolescents’ cognitive outcomes and educational attainment in Malawi”, by Kämpfen, F.; Zahra, F.; Kohler, H. P. and Kidman, R. (2022), in which authors conduct a study to find out how the economic and social impacts we receive at birth or in early childhood affect the cognitive and educational development of adolescents, specifically in the context of Malawi.

Prenatal and early childhood conditions are critical to long-term human capital development. Previous studies have shown that both extreme and subtle shocks, in utero and during the early months and years of childhood, can have lasting effects on children’s later educational performance and health.

These negative impacts can affect children through biological and social pathways that determine educational and cognitive outcomes. For example, prenatal and postnatal undernutrition can impair brain development. In addition, it can reduce the investment parents make in maternal, infant, or both maternal and infant nutrition, and thus affect long-term cognitive outcomes. 

All of this helps to form a small environment in which poor fetal and infant cognitive development takes place, setting the stage for later development.

There is little evidence on how multiple and frequent negative shocks, common in households in low-income country contexts, affect children and adolescents. And there is even less evidence located in sub-Saharan Africa. 

Thus, authors ask several questions: do multiple negative shocks affect adolescents’ educational performance?; do the effects differ by gender?; and do investments in nutrition and education mediate the relationship between economic shocks and adolescent cognitive outcomes?

Before explaining how the study was conducted, a brief review of the existing literature is in order. 

Studies establish that the prenatal environment can affect the fetus, with short- and long-term consequences for its health. This is based on the assumption that human capital development is linked throughout the life course. A shortage of investment during this critical period, for example, as a result of negative shocks that harm a household, can be harmful for later decades. 

Thus, children with unfavorable prenatal or early childhood conditions may not only suffer worse outcomes in later periods of their lives in multiple areas, but may also have a lower return on the investment made in them because of their disadvantages. 

Gestational and early childhood shocks can affect through biological and social pathways. For example, these shocks can result in low birth weight, which is associated with poorer health in childhood and adolescence. On the other hand, in the social domain, parental preferences may determine investments in child health and education in response to a shock. 

The analysis is based on the Adverse Childhood Experiences (ACE) project of the Malawi Longitudinal Study of Families and Health (MLSFH). Data were collected from rural areas, specifically from three districts in Malawi: Mchinji, Rumphi, and Balaka, which relative to other districts in the area, are not among the most disadvantaged, but are at the midpoint. The sample included a total of 1,559 adolescents, for whom information is available on whether their household experienced economic shocks in the year they were born. 

Authors found that two or more moderate economic shocks in the year of birth negatively affect adolescents’ educational and cognitive outcomes, although there is not the same pattern for boys as for girls, with a greater disadvantage for the latter. 

The study supports the policies aimed at alleviating social, gender and educational inequalities in Malawi and sub-Saharan Africa in general. Although the gender gap has been narrowed in recent years, overall elementary school completion remains low. Despite apparent gender equality in education, dropout pathways are also highly gendered: boys often drop out for work, girls for pregnancy. 

Evidence of the detrimental impact on cognitive development should imply greater investment in the health and well-being of pregnant mothers, while an educational investment should also be contemplated to improve school conditions for children. 

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Exploring the use of “nudges” to improve prevention of STD transmission in men. Behavioral Economics Club

By 5 Mins Read

Friends of the Behavioral Economics Club, this week we present the paper “Exploring the use of nudges to improve HIV and Other Sexually Transmitted Infection Testing Among Men Who Have Sex With Men”, by Aung, E. T.; Fairley, C. K.; Chow, E. P. F.; Maddaford, K.; Wigan, R.; Read, D.; Taj, U.; Vlaev, I. and Ong, J. J. (2022), in which the authors ask the question of whether nudges, which belong to behavioral economics theory, could be useful when it comes to improving prevention of ITS. 

Several health organizations recommend that people who are sexually active and, above all, have multiple sexual partners be screened for HIV and other sexually transmitted diseases. 

Regular screening for STDs plays an integral role in the control of pandemics of this type, because early detection of infections helps to reduce morbidity and onward transmission, as well as the negative effects of the disease for the person who contracts it. 

As a study population for the current paper, the authors chose gay and bisexual men (and, in general, men who have sex with men). 

The Australian Periodic Gay Survey reported an increase in HIV testing between 2016 and 2020, however, there was a decline in the number of tests in 2021.

The authors believe that the most effective way to increase early detection of HIV and other STD infections is to use behavioral economics strategies effectively. Why?

Well, because the decision to obtain an HIV test is identifiable with economic theories, as it involves making decisions taking into account benefits (early treatment of STDs) and costs (the time it takes to get tested, difficulties in accessing clinical services, test anxiety…). 

Thus, the authors put forward the idea of “nudges,” which, basically, is a discipline that is designed to influence behavior in a predictable way, increasing the benefit to the individual and the community at large. 

Nudges are attractive policy options because they can be very effective, maintain the individual autonomy of those being nudged, and can often be achieved at low cost. 

A very famous and effective form of nudging, if done correctly, is message development. These can be framed so that the same decision or choice can be presented using positive, negative, and/or other framing. Due to the principle of loss aversion, this can change the attractiveness of each of the options presented within the message. This, applied to STD transmission, is something that few studies have explored. 

This study was conducted with the help of the Melbourne Sexual Health Center, which is a mental health clinic in Victoria, Australia. This clinic uses a computer-assisted self-interview system that all clients register upon arrival at the clinic. They are also briefly asked about their sexual history in that self-interview.

In addition, they are asked if they would like to receive a reminder every three months advising them to be screened as a routine process, specifically, if they would like to receive the reminder by SMS. Between 80% and 90% of the men chose to receive a reminder. 

This entire process was repeated with 309 clinic users over 18 years old who agreed to participate and receive reminders.

These reminders could be formulated in different ways. First, in a neutral way (“your next checkup is due, call to schedule an appointment”), in a personalized way (“hello, ‘name’, your next checkup is due, please make an appointment”), following social norm (“your next checkup is due, most people get tested when they receive this message, please make an appointment”), positively (“you should have your next checkup, to stay healthy regular testing is recommended, please make an appointment”) or negatively (“you should have your next checkup, not testing regularly could harm your health, call for an appointment”). 

Participants had to choose which of all the forms they preferred for their reminder message. 

The study showed that they preferred neutral, personalized, positive messages over negative or social norm messages. The majority of participants also preferred the SMS message over an email. 

Most men in the study already received SMS reminders from before and in a neutral way, so it was not surprising that the most popular message was such a message. This may be because of the exposure effect, i.e., people like things they are familiar with. However, younger men preferred the positive message, so it would be appropriate to use it for people in the newer generations. 

The key to the nudges is to make it easy for people, which is ultimately what we should focus on. 

Behavioral economics is transforming how we understand human behavior in markets. If you want to become an expert in this discipline, look no further. The Master in Behavioral Economics from Evidentia University provides you with the tools you need to excel. Study online with flexibility while earning a degree recognized internationally.

Evidentia University is a licensed university in the United States, ensuring a world-class education. Enroll today for as low as $208 USD per month.

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Is stopping mass consumption the key to improving environmental health? Behavioral Economics Blog

By 4 Mins Read
Finnish landscape with forest and moon by night. Finland environment

Friends of the Behavioral Economics Blog, this week we present the paper “Addressing Consumerism and the Planetary Health Crisis: Behavioral Economics Approach in Public Policy” by Sarkar, A. (2022), in which the author speaks about the different environmental problems that have been emerging in the last few years and are related to consumption, plus, he points out the utility of behavioral economics to improve the reduction of the negative impacts they have. 

Climate change, environmental pollution and the loss of biodiversity are the great enemies of humanity and, currently, its greatest threat.

They are called “The Planetary Crisis Triad”, and they cause serious problems in numerous areas of life. For example: the increase in extreme weather events, the spread of vector-borne infectious diseases due to the expansion of invasive arthropods into regions that were previously cold climates, hormonal diseases due to exposure to pollutants, even mental illnesses, among others many consequences.

That is why, for some years, the guidelines dictated by a series of international protocols and agreements have been followed, which have achieved some progress. For example, a decline in the production of hazardous chemical materials such as persistent organic pollutants, the rapid growth of renewable energy, and a commitment to stop promoting coal-fired power plants.

Even so, no international treaty has focused on stopping the unnecessary mass consumption at the individual level. Consumption is the main pull factor for high energy demands and depletion of the Earth’s finite resources, and industries are constantly increasing their output to meet customer demand.

In this sense, the rich countries and emerging economies cannot deny their part of responsibility in controlling current levels of consumption.

In recent years, the promotion of electric vehicles has been very important in stopping greenhouse gases, and its effects are expected to be even greater in the coming years.

However, it is worth noting that growing energy demands cannot be met by renewables alone. Renewable energy sources provide clean energy, but they also produce toxic waste. The evidence therefore makes it clear that success in tackling the planetary health crisis depends on tackling our consumption.

This is where the concept of circular economy appears. It is a novel discipline that aims to operate in the use of resources within closed-loop systems, reduce pollution and prevent resource leakage while maintaining economic growth. The system is called “circular” because it aims to reduce, reuse, recycle and recover.

However, circular economy has been criticized for having a limited conceptual basis and lack of consistency in terms of how it can contribute to sustainable development, for example if recycling itself is energy intensive.

In today’s society, a pervasive sense of dissatisfaction drives humans to desire material things and their subsequent rapid disposal, resulting in the purchase of newer products (here terms such as “planned obsolescence” become relevant). For example, we now buy 4-5 times more clothes than we did 30 years ago, leaving a staggering environmental impact. Globally, the fashion industry produces almost 90 million tons of waste per year, and consumes at least 80 billion liters of water.

Drawing on psychology and economics, behavioral economics has repeatedly proven its usefulness for many purposes, and the author believes that it could provide effective answers to the problem of the environment.

For example, humans are known to move in a fast, immediate world, so simple messages about stopping buying so much and using biodegradable products, switching to “eco-friendly” alternatives, might be more helpful.

Taxes and allowances can work well at times; however, simple economic incentives are not useful for everything; for example, charging for plastic bags in stores does not prevent customers from taking them away.

The author also mentions nudges, which are based on the fact that humans sometimes need nudges to act rationally. Well thought out, they can be effective. For example, placing information on restaurant menus about plates made with local or vegetarian products, to encourage their consumption.

The conclusion is that a paradigm shift is necessary to motivate and lead people towards a pro-environmental path, through effective social learning, advertising and communication campaigns, etc. For this, it seems that behavioral economics and the architecture of choice are very useful tools whose application should be explored.

​​If you want to know more about Behavioral Economics and how to apply it to human behavior, take a look to our

Behavioral economics is transforming how we understand human behavior in markets. If you want to become an expert in this discipline, look no further. The Master in Behavioral Economics from Evidentia University provides you with the tools you need to excel. Study online with flexibility while earning a degree recognized internationally.

Evidentia University is a licensed university in the United States, ensuring a world-class education. Enroll today for as low as $208 USD per month.

 

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