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Paula Atienza

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Friends of the Behavioral Economics Blog, this week we present the paper “How does information on environmental emissions influence appliance choice? The role of values and perceived environmental impacts”, by He, S.; Blasch, J. and van Beukering, P. (2022), in which authors carry out a study to know how the fact of having information about the environmental impact generated by our actions affects our appliance choice. 

Private residences account for 27% of total electricity consumption worldwide. The main uses of this percentage of electricity are heating, household appliances, water heating, space cooling, cooking and lighting. 

In the context of the European Union, household appliances and electrical appliances that are responsible for performing these functions, mostly have an energy label that follows a specific framework created by the EU.

With this labeling, the EU aims to provide clear and simple information on energy-related products, so that consumers can make informed choices and, consequently, reduce their energy bills while contributing to mitigating climate change. 

To this end, public authorities and academics have made efforts to provide real and constantly improving information on energy labels. 

One of the many ideas behind this labeling is that one of the best ways to encourage investment in energy efficiency is to directly communicate the link between energy efficiency and carbon emissions. According to the knowledge deficit model, individuals may have a reluctance to engage in pro-environmental behavior due to a lack of knowledge about a specific environmental problem, or about ways to address it. 

Providing information on environmental emissions is one way to fight the knowledge deficit, as it establishes a direct link between energy efficiency and environmental impact and may facilitate individual efficiency investment decisions. 

Most existing studies demonstrate a positive impact of environmental signals (such as labels) on the adoption of energy efficient devices, although the effectiveness varies between individuals. 

However, previous studies on energy labeling have rarely investigated the psychological factors of individuals that produce this variability in label effectiveness. As research in environmental psychology suggests, the way individuals process environmental information may also be affected by the individual’s values. These values reflect the individual’s overall goal in life and may affect information processing, as well as influence whether individuals pay more or less attention to environmental information, and how they interpret it. 

Personal experiences, such as experiences in extreme weather conditions, can lead to a high level of risk perception and concern, ultimately resulting in pro-environmental behaviors. Theoretically, having experienced adverse environmental events suggests psychological proximity between the problem and the individual, which may increase the likelihood of supporting climate change mitigation and taking action. However, the empirical evidence is inconclusive. 

To investigate the effectiveness of energy labels, authors conducted an online questionnaire to nearly 1,000 subjects.

Overall, the results reported no significant effects on environmental emissions from the labels. However, providing information on carbon emissions may potentially encourage investment in energy efficiency among individuals with relatively high environmental values who are concerned about climate change. 

Additionally, authors found that providing information on carbon emissions along with other pollutant emissions may increase the likelihood of choosing more efficient appliances among individuals with high environmental awareness. 

However, information on carbon emissions alone does not show significant effects. It would seem that it would be the attitudes and energy saving habits of individuals that would contribute most to energy efficiency decisions. 

Encouraging investment in energy efficient appliances and providing information on air pollutants may be useful strategies when individuals intentionally seek detailed information on which appliances to purchase. 

It is worth noting that authors conducted their study in the context of the Netherlands, where residents are relatively aware of the problems associated with climate change, but are not highly concerned about air pollution, so they encourage other experts to conduct studies in different contexts where the findings may differ. 

If you want to know more about Behavioral Economics and how to apply it to human behavior, take a look to our Master of Science in Behavioral Economics, a 100% online program that you can take in Spanish or English, with special grants for readers of the Behavioral Economics Blog.

Friends of the Behavioral Economics Blog, this week we present the paper “Age differences in the behavioral economics of cannabis use: Do adolescents and adults differ on demand for cannabis and discounting of future reward?”, by Borissova, A.; Soni, S.; Aston, E. R.; Lees, R.; Petrilli, K.; Wall, M. B.; Bloomfield, M. A. P.; Mertzani, E.; Paksina, A.; Freeman, T. P.; Mokrysz, C.; Lawn, W. and Curran, H. V. (2022), in which authors carry out a study to know how adolescents and adults behave regarding cannabis use, investigating, precisely, the aspects of demand and future rewards discount. 

Cannabis is one of the most widely used recreational drugs worldwide. Approximately 3.8% of the world’s population used it in the past year. 22.5% of 15-year-olds in England, and 28% of 15-16 year olds in the United States, reported using it in 2020. 

It has been noted, in numerous studies, how early onset of cannabis use appears to be related to higher frequency of use in adulthood. In particular, initiation of cannabis use before the age of 18 years has been associated with a higher prevalence of cannabis use disorder within 12 months of first use. In other words, cannabis use before the age of 18 years poses an increased risk of persisting into adulthood.

We have already mentioned several times why adolescence represents a particularly vulnerable period for human beings. It is a stage of psychological development that involves changes in executive functioning involved in decision making and impulse control. 

Cannabis has a wide range of effects on cognition, and therefore, exposure to this drug during early adolescence may adversely affect cognitive development. 

Differences in cannabis use behavior and decision-making between adults and adolescents can be examined through behavioral economics, as proposed by the authors, since psychological and economic concepts are applied to help and shed light on the decision-making process of individuals. 

From behavioral economics comes the concept of “reinforcer pathology”, which helps to understand the functioning of addictions. This concept refers to the fact that problematic substance use can arise from a very high valuation repeatedly given to a reinforcer, that is, a drug, as well as an excessive preference for immediate rewards over delayed rewards, even if the latter are more beneficial. 

The latter is called “delay discounting”, and refers to the reduction in the value of a reward as the delay in receiving it increases, since immediate rewards are more highly valued. Cannabis use has been associated on multiple occasions with a very pronounced delay discounting, so understanding it may be a very important factor in understanding adolescents’ risk for developing an addiction disorder. 

Authors then set out to investigate how adolescents and adults who use cannabis behave in terms of demand for the drug and delay discounting. To do so, they gathered 274 participants and surveyed them. The participants were divided into several groups: a group of adolescents aged 16-17 years and a group of adults aged 26-29 years who claimed to have used cannabis 1-7 days per week in the last 3 months, and a control group who claimed not to have used cannabis more than 10 times in their lifetime. 

Those who used psychotropic medication, had a history of psychotic disorders and used any other drug more than twice a month, especially during the last three months, were excluded. 

Some of the results obtained were in line with what was expected. People using cannabis had more pronounced delay discounting than people in the control group. There were no differences between adolescents and adults in terms of delay discounting, contrary to what the authors expected, and there was also no interaction between age group and cannabis use

Regarding cannabis demand, adolescents had lower price sensitivity than adults, and higher consumption at zero price. This surprised the researchers, as it does not seem logical that, if adolescents earn less money, they would have less sensitivity to the price of the drug than adults. 

Authors conclude the study by recommending further research in this field, as the problem of cannabis and its use is an interesting and still largely unknown topic. Furthermore, the application of behavioral economics is strongly recommended to better understand how addiction mechanisms in general and cannabis use in particular work. 

If you want to know more about Behavioral Economics and how to apply it to human behavior, take a look to our Master of Science in Behavioral Economics, a 100% online program that you can take in Spanish or English, with special grants for readers of the Behavioral Economics Blog.

Friends of the Behavioral Economics Blog, this week we present the paper “Behavioral Economics and Tobacco Control: Current Practices and Future Opportunities” by Littman, D.; Sherman, S. E.; Toxel, A. B. and Stevens, E. R. (2022), in which authors think about how we could apply the seven basic principles of behavioral economics to prevention campaigns of tobacco use. 

Improving tobacco control and treatment remains a medical priority. Despite progress in recent years, smoking remains the leading preventable cause of death in the United States, causing 480,000 deaths annually and $300 billion in related economic losses.

Current behavioral and medical treatments have been successful, but not enough. To address the considerable health burden (even worse now as we continue fighting against Covid-19), there is a continuing need to develop better tobacco use control and prevention interventions. 

By combining elements of economics and psychology, behavioral economics provides a framework for designing novel solutions to help smokers quit when traditional interventions have failed to do so. 

The principles of behavioral economics, according to Dawnay and Shah, would be “other people’s behavior matters”, “habits matter”, “people are motivated to do the right thing”, “one’s own expectations influence behavior”, “people are loss averse”, “people are bad at calculating”, and “people want to feel involved and effective”. In total, 7. 

However, the full list of principles has not been widely used in the field of tobacco control and treatment or prevention. The vast majority of related studies focused on financial incentives and few were devoted to other principles. Therefore, this is what the authors propose: to expand the potential application of the 7 principles to tobacco control and treatment. 

In a quick compilation of behavioral economics articles applied to tobacco prevention and treatment, 198 articles out of 230 were about financial incentives. But what about the other possibilities?

The authors mention that other people’s behavior matters. That is, when making decisions, people tend to model their own behavior based on those around them. The extent of influence of others’ behavior also relates to who has the most influential personality. The ingroup bias suggests a predilection for modeling the behavior of those with a shared social identity. Even celebrities would influence normal people. 

Future research could evaluate the performance of campaigns by influential people who have quit smoking and their results, which may encourage viewers to follow their path.

The second principle mentions that habits matter. Behavior is habitual and we always follow routines. Relying on habits reduces the mental energy required to complete tasks, even if the habits are not efficient or healthy. Habits provide opportunities for behavior change, first by using current ones, and also by creating new ones.

Future research may evaluate replacing cigarettes with e-cigarettes, for example, so that the habit of smoking continues, but harm is reduced. 

Authors also mention that people are motivated to do the right thing. The perception that an action is carried out for the public good or for the good of others influences behavior. Appealing to people’s sense of altruism can be an effective and efficient approach to behavior change.

On the other hand, there is the idea that one’s own expectations influence behavior. This happens because people want their actions to be in line with their values and commitments. Engaging openly with friends, family and even strangers may increase the extent to which behavior change occurs, which could be used in this context. 

The fifth principle is that people are loss averse. Behavioral economics research suggests that losses produce more emotional reactions than gains. Developing and testing interventions that change the framing of economic incentives to exploit this principle could be interesting, focusing not so much on gaining something, but on losing it. 

On the other hand, people tend to be bad at math. Many studies suggest that humans have a poor understanding of probability and statistical concepts in general, which helps explain the popularity of playing the lottery. To exploit this lottery’s appeal, smokers could be told what they could have won if they had completed an action related to quitting smoking, for example.

Finally, the seventh principle: people want to feel involved. Classical economic theory posits that giving people more choices results in better decisions, as long as it doesn’t become overwhelming. Balancing the two ideas, increasing self-efficacy by helping smokers understand their options for quitting and emphasizing their ability to quit, makes people more likely to quit for good. 

Authors encourage the continued development of projects dedicated to the treatment of smoking from behavioral economics, as they believe that it provides very good ideas to achieve positive results for such a representative problem for the health of people around the world. 

If you want to know more about Behavioral Economics and how to apply it to human behavior, take a look to our Master of Science in Behavioral Economics, a 100% online program that you can take in Spanish or English, with special grants for readers of the Behavioral Economics Blog.

Friends of the Behavioral Economics Blog, this week we present the paper “Top Ten Behavioral Biases in Project Management: an Overview”, by Flyvbjerg, B. (2021), in which the author explains a series of biases related to cognition, politics and power, that he considers fundamental to bear in mind in project management. 

Since the early work on biases by Tversky and Kahneman in the 1970s, the number of biases identified by behavioral scientists has skyrocketed in what has been called “a behavioral revolution” in economics, management, and the social and human sciences. 

In this article, the author gives a description of some behavioral biases that he considers particularly important in project planning and management, so if you are a project manager, you should pay attention! 

The biases chosen by the author are those that, from his point of view, are most likely to trip up project planners and managers, negatively impacting project outcomes if the biases are not identified in advance and addressed early. 

The author argues that behavioral biases are not limited to cognitive biases alone, but that “political biases” also come into play. 

For him, behavioral economics in its current form focuses too much on cognitive psychology: economic decisions are taken into account too much in psychological terms, the author believes that more attention should be paid to political, sociological and organizational perspectives. 

Political biases, therefore, would be those arising from power relations, particularly important for big decisions and projects. For decision making in hierarchical organizations, involving office politics, sales techniques, economic funds, etc., political biases would be very useful. 

Some of them are the illusion of control, the conservatism bias, the normality bias, the topicality bias, the neglect of probability, the cost-benefit fallacy… among many others. The author decides to focus on some of them, although here we will not be able to name all of them, if you want to know more, we recommend reading the original article. 

On the one hand, we have the optimism bias, which is cognitive, and refers to the tendency of people to be overly optimistic about the results of planned actions. 

In optimism clutches, people are not aware that they are being optimistic. They overestimate the benefits and underestimate the costs. They involuntarily misrepresent success scenarios and overlook the potential for mistakes. As a result, plans are unlikely to yield the expected benefits. 

Another interesting bias is the uniqueness bias, which psychologists have identified as the tendency of individuals to see themselves as more unique than they really are, e.g., uniquely intelligent or attractive. 

This bias is particularly interesting in project management, because project planners and managers are systematically “primed” to see their projects as unique and different. This bias tends to prevent these managers from learning, because they think, precisely, that they have little to learn. And this, research has shown, leads managers to be affected by this bias performing worse than others. 

By seeing things from this perspective, planners focus on the specific circumstances and components of the project they are developing and look for evidence in their own experiences, to the detriment of the final project. 

This bias increases the underestimation of risk, leading to risk-taking that probably would not have been accepted if the actual probabilities had been known. 

There is also the planning fallacy, which the author classifies as a subcategory within the optimism bias, which arises from individuals producing plans and estimates that bear little resemblance to reality. It is the tendency of individuals to, on the one hand, underestimate the costs, schedules and risks of planned actions, and, on the other hand, overestimate the benefits and opportunities of actions, creating risks for projects. 

The author also mentions anchoring, which is the tendency to rely too much or “anchor” on one piece of information when making decisions. Anchoring feeds into other biases, such as availability bias and topicality bias, which induce people to anchor on the most readily available, easily accessible information, as well as the most recent information. This results in the underestimation of probabilities in general, and therefore of risks in particular. 

The author names other interesting biases, but we have made a small selection here. He also recommends further research on the subject, since biases affect human beings in all facets of their lives and, therefore, knowing about them is not only useful for business or interpersonal relationships, but also for oneself. 

If you want to know more about Behavioral Economics and how to apply it to human behavior, take a look to our Master of Science in Behavioral Economics, a 100% online program that you can take in Spanish or English, with special grants for readers of the Behavioral Economics Blog.

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. 

Authors recommend taking the results with caution, as the experiment was conducted in Australia, and may not be a globally representative population. 

If you want to know more about Behavioral Economics and how to apply it to human behavior, take a look to our Master of Science in Behavioral Economics, a 100% online program that you can take in Spanish or English, with special grants for readers of the Behavioral Economics Blog.

Friends of the Behavioral Economics Blog, this week we present the paper “Monetary incentives do not reduce the repetition-induced truth effect” by Speckmann, F. and Unkelbach, C. (2022) in which the authors carry out an experiment to know whether the introduction of financial incentives affects when it comes to distinguish between a lie and a truth, specifically, considering the repetition-induced truth effect. 

People see, read and hear many different events and statements every day (news, social networks, conversations…) that they may doubt or believe.

Apparently, people use repetition as a signal to lean one way or the other when it comes to making a decision about the veracity of what they hear. Therefore, they tend to believe statements that are repeated more, compared to statements that are repeated less. 

This phenomenon is known as the illusory truth effect, truth by repetition, or simply the truth effect.

In a paper by Hasher in the 1970s, participants were presented with a total of 60 statements. Half of them were false and half were true. The participants were exposed to them in two sessions. During each of these, 20 of the 60 statements were repeated, and the remaining 40 were newly introduced. That is, 20 of the 60 statements were shown in the two sessions. After the presentation phase in each session, participants were asked to rate the validity of each statement. The participants judged the repeated statements as more valid and credible than the new statements, which demonstrated the basic truth effect. 

The effect has gained more prominence in recent years, as it may serve as an explanation for people’s belief in conspiracy theories, misinformation and fake news, due to the frequent repetition of false information on the internet and social networks. 

In this study, the authors investigate what happens if, when a decision has to be made, economic incentives must be taken into account. That is, what happens when, when choosing between qualifying a statement as true or false, a certain amount of money is gained or lost, depending on whether one gets it right or wrong. 

In other words, they asked whether the repetition-induced truth effect persists if participants’ decisions are highly financially incentivized. 

The fact that incentives diminish the truth effect would suggest that the real-life impact of repeating information is not as critical as it seems. 

However, if monetary incentives do not reduce the truth effect of repetition, it would underline the relevance of the phenomenon in real life. At the theoretical level, it would show that people potentially consider repetition as a valid cue for making their decisions. 

In the experiment, the authors used 120 statements, 60 of which were true and 60 false. They recruited a total of 321 people. They divided them into three groups: the high-incentive group (they could earn up to 12€), the medium-incentive group (they could earn up to 6€), and a final group with no incentives. However, all three groups were told that they could earn a maximum of €4. 

For each statement, they had to indicate whether they considered it true or false. They did not know this, but for each correct answer they would receive €0.10 and for each false answer they would lose €0.10, and could never get negative results. 

Although some participants could receive up to €12 and others up to €6, it seems that the incentives did not substantially influence the repetition-induced truth effect. 

Using an exploratory contrast, the authors found a slight difference in the truth effect between the “no incentive” conditions and the “with incentive” conditions: participants showed a slight reduction in their tendency to judge repeated information as true, but the effect was very small in size, so it is not considered strong evidence. 

Significant differences occurred, however, when it came to response time. Being shorter, it seems logical to think that participants were motivated to answer correctly as often as possible to increase their gains. 

The results are consistent with others obtained in previous literature, and illustrate the robustness of the repetition-induced truth effect by showing that, even when adding direct consequences to truth judgments, there is no change in people. 

Thus, the data support existing cognitive explanations of the repetition-induced truth effect, with potential implications for real-world phenomena that have been explained for some time now, such as belief in fake news, conspiracy theories, among others. 

If you want to know more about Behavioral Economics and how to apply it to human behavior, take a look to our Certificate in Behavioral Economics, a formative program, in English or Spanish, 100% online and certified by Heritage University (USA). Now, with discounts for members of this club.

We are proud to announce that FeedSpot has ranked us in the top 10 best Behavioral Economics blogs on the internet. We are ranked as number 5, thanks to the collaboration of all our readers. From here, we want to thank both FeedSpot and you. We keep it up!

Friends of the Behavioral Economics Blog, this week we present the paper “Why do people stay put in environmentally stressful regions? Cognitive bias and heuristics in migration decision-making”, by Czaika, M. and Reinprecht, C. (2022), in which authors talk about the cognitive biases and heuristics that may underlie migration-related decision making by people living in stressful environments.

Human migration and mobility are massive phenomena. Currently, more than 270 million people live outside their country of birth, more than 700 million have moved between regions within the same country, and 1.2 billion people cross borders for short trips each year.

Until they make the decision to move, these people are part of a latent population of potential migrants. 

In addition, about 500 million people think that they may have to move, due to environmental problems, in the next 5 years. 

Most people exposed to slow or rapidly deteriorating environmental conditions do not migrate despite the availability of exit options. This is because there are drivers of immobility that limit migration and motivate people to wait and stay. 

There are economic, political, social, cultural, demographic, ecological and environmental factors that affect decision making of this type. 

The fundamental ones are usually economic, such as unemployment, wage disparities, or lack of economic opportunities. 

In addition to economic factors, socio-political factors such as wars and civil strife, instability, insecurity, military recruitment, human rights abuses, lack of democratic rights… are key structural drivers of migration. 

On the other hand, social ties with family and community are a very important retention factor. In a 2020 survey of citizens of Ethiopia, India, Peru and Vietnam, it was found that the majority of people who wanted to migrate did not do so because they did not want to leave their family living there. 

The role of climate change is gaining momentum in migratory aspects and is worth mentioning, because it implies that both mobility and immobility may be the behavioral outcome of slow or rapid onset environmental stressors. However, economic factors remain the most relevant. 

We may wonder why many more people do not migrate to take advantage of opportunities elsewhere, or why more people living in an environmentally stressful situation do not decide to escape. 

The combination and interaction of economic, political, social, cultural and demographic factors shape the effect of environmental stressors on migration. They often act simultaneously, which makes it more difficult to analyze the reasons for not migrating. 

What experts mention is that, in general, migration decision-making can be considered a two-step process: first, people decide whether they want to migrate, then where they want to relocate. 

The first step consists of developing the intention, rather than simply a vague desire; the second step involves considering migration or behavioral options and deciding whether to migrate or stay. 

To migrate, individuals need economic, social, emotional and cognitive resources. If they aspire to a better life but cannot execute migration, people may feel trapped, frustrated, and experience cognitive dissonance. 

Behavioral sciences propose three main cognitive biases: first, the status quo bias, that is, people have a strong preference for the context and situation in which they currently live, which can be reinforced by the endowment effect, which would be the second bias. According to this, people value what they have more than what they could have, even if both are of equal value. And finally, regret avoidance, i.e., people prefer to avoid anticipated negative outcomes resulting from action rather than inaction. 

Authors recommend that people with migration aspirations decide on their long-term relocation after exploratory visits that reduce uncertainty about the new place of residence. 

If you want to know more about Behavioral Economics and how to apply it to human behavior, take a look to our Certificate in Behavioral Economics, a formative program, in English or Spanish, 100% online and certified by Heritage University (USA). Now, with discounts for members of this club.

Friends of the Behavioral Economics Blog, this week we present the paper “Healthy Nutrition and Behavioral Economics: From Principle to Practice”, by Yasenok, V. O.; Smiianov, Y. V.; Pidmurniak, O. O.; Kravchuk, L. S. and Hornostaieva, P. O. (2022), in which authors talk about a few studies carried out by them where it is observed how different theories of behavioral economics can be applied effectively when it comes about achieving a healthy nutrition. 

Healthy nutrition provides proper growth and development to all living beings, contributing to the strengthening of health and disease prevention.

According to WHO, it is necessary to increase the amount of fruits, vegetables, fish, whole grains and nuts in the diet. It is also necessary to limit the consumption of processed meats, red meat, sugary drinks and, in general, products with a lot of added sugar, salt or alcohol. 

Poor nutritional quality can deteriorate health and make us develop certain pathologies. 

What we fail to understand is how, when information on good nutrition is available, the incidence of associated diseases continues to increase. 

Traditional economic analysis cannot explain why many people choose risky behaviors that can harm their health. For this reason, more and more scientists around the world are focusing on behavioral economics, which tries to explain why people behave irrationally. 

In the book “Nudge” by Thaler and Sunstein, the idea appears that understanding how people make decisions can be used to encourage them to make the right decisions, without limiting freedom of choice.

Authors discuss, in an attempt to provide new insights, some interesting data they obtained from a study conducted with students at Sumy University. 

First, it is important to understand that environmental factors such as the social environment, the presence and level of distractions, and even lighting, can affect people’s food choices. Therefore, some of these factors can consequently be used to “nudge” people toward rational choices. 

For example, low-nutrient fatty products are currently widely available, inexpensive, and sold in large quantities. This makes people opt more often for them, even if they are trying to maintain a good diet. It is also important to consider the fact that people tend to be overly optimistic about their health in the future, constantly postponing the abandonment of negative eating habits, leaving them “for tomorrow”. 

Most decisions about nutrition are made primarily by the automatic system. The processing of information about the caloric content of food, based on a large amount of numerical data, requires certain efforts on the part of the person to understand them.

Authors propose a color labeling system that they call the “traffic light method”, with a small green label for the healthiest foods, a yellow or orange label for those of medium level and a red label for foods that are higher in calories and, in general, less healthy. This makes it much easier for people to know which are the healthiest choices. 

There is also the “half plate method” that some people find very visual. It consists of imagining a plate and filling half of it with “green foods”, such as fruits and vegetables, and always taking it as a reference for meals. 

In an experiment conducted by the same authors in 2020, it was shown that placing healthy foods at eye level in a high school cafeteria, together with the color-coded labeling method, contributed to an increase in their consumption. 

Behavioral interventions in the food environment should be at the heart of health policy to help improve people’s nutritional behavior and play a major role in disease prevention. 

In addition, behavioral science, and in particular behavioral economics, is again shown to be very useful in shedding light on important factors that contribute to the emergence of major public health problems. 

​​If you want to know more about Behavioral Economics and how to apply it to human behavior, take a look to our Certificate in Behavioral Economics, a formative program, in English or Spanish, 100% online and certified by Heritage University (USA). Now, with discounts for members of this club.

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 Certificate in Behavioral Economics, a formative program, in English or Spanish, 100% online and certified by Heritage University (USA). Now, with discounts for members of this club.

 

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 Certificate in Behavioral Economics, a formative program, in English or Spanish, 100% online and certified by Heritage University (USA). Now, with discounts for members of this club.