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

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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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Principles of behavioral economics applied to tobacco use. Behavioral Economics Blog

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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.

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

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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.

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Options to include the principles of behavioral economics to nutritional health. Behavioral Economics Blog

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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.

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Cognitive biases and risky driving behavior. Behavioral Economics Club

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Friends of the Behavioral Economics Club, this week we present the paper “Cognitive Biases, Risk Perception, and Risky Driving Behaviour”, by Mairean, C.; Havârneanu, G. M.; Baric, D. and Havârneanu, C. (2022), in which authors carry out a study to know wether a couple of cognitive biases are related to risky driving behavior, and if it is so, how is that relationship. 

Risky driving behavior represents a threat to the driver but also to other road users. These behaviors are, for example: high speed, not respecting red lights or safe distances, not wearing seat belts or driving under the influence of drugs.

A significant number of studies suggest that the majority of traffic accidents are related to cognitive deteriorations and decreased driving performance caused by alcohol or other drugs. In fact, both the volume of alcohol in a particular drink and excessive drinking are associated with dangerous driving behavior.

Studies show that alcohol consumption can influence driver’s self-perception, and suggest that people may believe they are more capable to drive after drinking.

But what about when the driver hasn’t been drinking? According to other studies, an important determinant of judgment or risky driving is represented by cognitive biases related to the evaluation of personal driving skills, personal control and perceived vulnerability in traffic.

Two common types of biases are the optimism bias and the illusion of control.

Optimism bias was used to describe people’s tendency to believe they are less vulnerable to negative events compared to their peers.

Although the optimism bias can improve self-esteem and motivation, an increased sense of invulnerability can have harmful consequences, leading people to engage in risky behavior or not take appropriate precautionary measures.

The illusion of control, on the other hand, would represent two ideas: on the one hand, the belief that one can control the results to obtain what he wants through his personal abilities; on the other hand, that these skills are enough to prevent negative outcomes, when in fact they are not.

Like the optimism bias, the illusion of control has been linked to risk behaviors, particularly in the area of ​​health and gambling. In road safety, it has been shown that it is related to risky driving.

It should be mentioned that different theoretical models affirm that the decision to carry out risky driving behaviors is made through the evaluation of risks and benefits.

The central aim of the study was to investigate the relationship of optimism bias and illusion of control with risky driving behavior in a sample of Romanian drivers, since Romania is the context of the study.

In Romania, every year, more than 9,000 people are seriously injured after traffic accidents. Furthermore, the Romanian context is of particular importance, given that Romania is a country with a significant history of weak road safety within the European Union.

A total of 366 drivers participated, approximately half were men and the other half were women. Optimism bias, illusion of control, and risk perception, as well as driving behavior, were measured.

The results revealed that optimism bias was negatively correlated with risky driving behaviors, while the illusion of control was positively correlated.

This contradicted the initial expectations of the authors. It appears that drivers’ belief that they are less vulnerable to negative traffic events does not condition them to engage in reckless driving behavior.

Taking previous literature as a reference, in addition to the results of the present study, it seems that the optimism bias can motivate drivers to take greater risks because they would feel less vulnerable; however, and this is the important point, this may not be true when drivers perceive that the causes of a possible accident are beyond their control and responsibility.

On the other hand, it seems that a high illusion of control is related to a high tendency to carry out risky behaviors when driving. Risk perception mediated the relationship between the illusion of control and risk behavior. That is, when the participants presented a high level of the illusion of control, they were more likely to perceive low risk in different traffic situations, which leads to a greater tendency to engage in risky behaviors.

Authors consider that these results inform professionals working in road safety that, in order to reduce cognitive risks, we must also reduce the perception of risk. In addition, they provide valuable information that individuals can use to prevent irresponsible behavior on the road.

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.

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Retirement and young people: who explains to them the importance of a good planification? Behavioral Economics Blog

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Friends of the Behavioral Economics Blog, this week we present the paper “Let’s Talk About It: Discussing Retirement with Multiple Sources is Associated with Retirement Preparation in Young Adults” by Treger, S. (2021), in which the author carries out an investigation to know what is the main source of information of young people about retirement and their general beliefs about it.

Managing personal finances can be overwhelming for young people but also grown-ups. With so many financial laws and terms, learning and keeping track of one’s finances can be complex and anxiety-provoking.

It can be an especially daunting topic for young adults who are approaching or transitioning into working life, as many are likely to have had little or no exposure to financial education.

The result is that young adults often have a poor understanding of finances.

Despite this, young adults seem to recognize that it is a very important topic and are interested in learning about it.

There are not many formal financial education programs in schools and institutes and, furthermore, according to the research, the ones used for that purpose seem to produce very small or almost insignificant effects. It looks like financial education from school does not have much impact on young people.

However, and although it is paradoxical, not having this financial education at school leads young people to look for different sources of information. The most common: parents. In fact, parental financial socialization has a stronger effect on healthy financial practices in young adults than school classes.

With the arrival of the internet age, it has never been easier for people of any age to interact with the economy. Now, young people who have not had much financial socialization can have their money to spend in a click. For this reason, this topic seems to take on special relevance.

Recent qualitative research suggests that young adults have mixed feelings about retirement. Using a sample of members of the millennial generation and generation Z, in a 2020 study, participants were asked to draw and write their idea of ​​what retirement and old age were, and found that they tended to have negative associations with aging but positive regarding retirement.

Interestingly, the concept of old age itself can affect the retirement preparation of young people. In a 2011 study, it was found that young adults’ attitudes toward retirement increased after they viewed a photo of themselves aging.

Young adults’ motivation to learn about retirement may lead them to look for multiple sources of information. The purpose of this article was to know whether young adults actively talk about retirement with various sources in their environment, which are these sources, and how these discussions prepare them for the process.

To do this, data was taken from interviews that belonged to another study, carried out with people born between 1995 and 2010. Only those of young people over 18 years of age were collected, reaching the figure of 1311 participants.

Parents were indeed the most common source of conversations about retirement in the sample. Participants who talked to their parents about the topic generally felt it was more important to learn about retirement, anticipated a greater likelihood of retiring, and believed they had gained interesting new knowledge about the topic from their parents. 

Of all the potential sources, parents are probably the ones young adults will interact with the most, in fact, during this study, approximately 51% of Americans ages 18-29 lived with their parents.

Still, parents are not the only source. The opinion of friends and close people was also taken into account. It seems that although we are in the Internet age, young people prefer to discuss these issues with people who know them and have experience. The couple’s source also appeared.

A series of doors open for future research. For example, researchers could explore whether the sources of retirement conversations, as well as attitudes and behaviors towards retirement, would change as the world recovers from Covid-19. That work would provide very useful information on how global economic downturns affect the financial habits of young adults.

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.

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Can the compromise of grown-ups with sports be improved? Behavioral Economics Club

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Friends of the Behavioral Economics Club, this week we present “Adaptive goals and reinforcement timing to increase physical activity in adults: a factorial randomized trial”, by Adams, M. A.; Todd, M.; Angadi, S. S.; Hurley, J. C.; Stecher, C.; Berardi, V.; Phillips, C. B.; McEntee, M. L.; Hovell, M. F. and Hooker, S. P. (2022), in which authors carry out a study to know whether economic incentives and an adaptative approach would help inactive adults to compromise with sports. 

Physical activity is a very powerful habit to reduce the risk of chronic diseases and to improve overall health.

Despite advances in technology, which had made possible that almost everyone has a wearable activity monitor (smart watches or smartphones), and the increasing awareness of the many benefits of regular physical activity, it seems that people have not substantially improved their sports habits in the last ten years.

A meta-analysis showed that, on average, adults’ physical activity has increased by just 2 minutes a day, which has no significant effect on their health or routine. And reducing disease risk requires powerful attacks.

The adaptative approach is a relatively new one, in which goals increase, decrease, or remain the same depending on the individual’s experiences while trying to achieve them.

In general, the used methods are based on static objectives. For example, a smartphone app will tell you: “today you must run for 30 minutes”, and the next day: “today you must run 40 minutes”, and so on, adding ten minutes to the daily goals.

However, these objectives do not adjust to the reality of people, and are insensitive to the specific changes each of them experience, which are rarely linear. This results in the abandonment of the behavior before it becomes a habit, which results in a lack of achievement of the final objective.

Meta-analyses also indicate that financial incentives were effective in increasing, and then maintaining, physical activity levels. Why? Well, because, as we have seen in previous articles, positive reinforcement is more effective when it is immediate.

The present study was carried out with the objective of observing if the use of an adaptive approach in combination with financial incentives would be effective in helping a group of inactive and sedentary adults to change their habits and improve their health through sport.

A total of 512 people from Arizona (United States) participated, between 2016 and 2018. The intervention lasted one year and they were followed up during the following one. Participants were between 18 and 60 years old and were adult men and women with sedentary or inactive lives.

The study required daily access to a smartphone. Three messages a day were sent to them, and they had to use an activity meter for a year. They were informed that they would receive a financial reward if they achieved their goals, up to a maximum of $365 if they met all of them.

Results showed that setting adaptive goals and combining them with immediate financial rewards increased participants’ physical activity and consequently improved their health.

Specifically, adaptive goals increased the probability of starting and maintaining these healthy habits by 50%. This method is very similar to having the services of a personal trainer, since it adapts to the personal evolution of each one of the individuals, making the progress much more powerful.

With the results obtained, it is deduced that using an adaptive approach it is possible to change or start a new activity, so that permanent behavioral changes are produced over time.

Authors also point out the need to delve into the effectiveness of financial incentives for other initiatives.

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.

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Are financial incentives useful when it comes about motivating homeless people to take care of their health? Behavioral Economics Blog

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Friends of the Behavioral Economics Club, this week we present the paper “Using financial incentives to suppor servie engagement of adults experiencing homelessness and mental illness: A qualitative analysis of key stakeholder perspectives”, by Reid, N; Brown, R.; Kozloff, N.; Sosnowski, A. and Stergiopoulos, V. (2021), in which authors carry out a study to know how useful financial incentives are to facilitate the anchoring of homeless people to preventive healthcare services.

Adults who are homeless and/or mentally ill are at higher risk for other health problems, and for those they do have to get much worse, compared to the general population.

This includes a higher prevalence and severity of chronic diseases, alcohol and drug use disorders, neurocognitive problems or premature mortality, among others.

Therefore, engaging this population in health services is challenging, due to factors such as complex health needs, financial barriers, limited availability of personalized services, stigma, and discrimination.

The literature about interventions to improve health service engagement of homeless and mentally ill adults is limited.

Furthermore, considering that low levels of engagement are associated with poor outcomes, including increased severity of illness, lower quality of life, and higher rates of intensive care use, implementing strategies to improve engagement of this population in services remains a priority in health care and social service settings.

Financial incentives have been used successfully to influence health decisions in a variety of populations and health care settings.

It has been suggested that financial incentives may be particularly effective in facilitating the participation of underserved populations in emergency health services in the short term.

For homeless and mentally ill people, existing literature suggests that financial incentives can be used as a successful tool to improve these people’s attendance at psychotherapy services, or increase their rates of medication adherence, and even to help stop smoking or using other substances.

Financial incentives can effectively influence health-related decision-making by appealing to our general tendency, as humans, to focus on the present and immediate rewards.

However, when we talk about financial incentives, an ethical problem arises regarding the coercion of this method, and its potential impact on autonomous decision-making.

As the appropriateness of financial incentives is still debated, more evidence is needed to better understand how they work and in what contexts they are truly useful.

This study focuses precisely on this last point. Part of the Coordinated Access to Primary Health Care for the Homeless with Financial Incentives, CATCH-FI. It is an intervention that brings together multiple organizations and sectors to provide comprehensive support in the short and medium term to homeless people and people with mental illness.

To choose the subjects, they had to meet the following requirements: homelessness, or precarious housing; unmet health needs; need support, and be over 18 years of age. A total of 34 participants were recruited.

Semi-structured qualitative interviews lasting approximately 40 minutes were conducted. Authors aimed to explore the perspectives and experiences of these people regarding financial incentives and health service.

The results demonstrated that financial incentives can successfully facilitate service participation for some users. A set of users in this study described the prospect of earning money as an external motivating factor that encouraged continued contact with CATCH-FI providers.

This is consistent with principles of behavioral economics, which suggests that extrinsically motivated individuals, and those particularly biased toward immediate rewards, may be especially likely to respond positively to financial incentives.

The fact that it has a greater impact on some people than on others seems to be related to intrinsic motivation. That is, this is a key ingredient to initiate and maintain healthy behaviors.

The study’s findings also speak to the importance of receiving quality care, as many users of the service described how it helped them stay in touch with him.

Authors point out, for future research, the importance of studying how financial incentives can be used to improve precisely these last two aspects: intrinsic motivation or quality of care.

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.

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How has the plastics sector changed with the pandemic and what can we do to reduce its impact? Behavioral Economics Club

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Friends of the Behavioral Economics Club, this week we present the paper “How Covid-19 could change the economics of the plastic recycling sector”, by Issifu, I.; Worlanyo Deffor, E. And Sumaila, U. S. (2021), in which authors analyze how the pandemic has affected the consumption and recycling processes of plastics and how can we stop the negative resultant impact. 

When the first cases of Covid-19 were identified, few anticipated the speed and magnitude of the impact it will have on the global economy. In fact, no one could have imagined the extent to which this new virus would close our schools, stores, airports…, or even how it would affect the price of oil.

Like most sectors, plastic recycling was affected by the pandemic, but the extent of the impact is still unknown.

Plastics are the soul of modern life, of the life we ​​know today. The bags in which we carry food from the supermarket to home, the bottles of water, the containers… plastics have penetrated many aspects of our society.

They are designed to be durable and, due to their low cost and versatile properties, in 2015 their production reached around 8.5 billion tons.

With the pandemic, a new concern has arisen: the increase in the production and consumption of plastics. For example, we all need some kind of protection against the virus and most of the population has obtained it in the form of masks, gloves or screens, all of which are made of plastic. In February 2021, China increased its production of single-use face masks 12 times a day to meet the high demand.

That is, the need for plastic seems to be stronger now due to the pandemic, which represents a growing environmental threat. In landfills alone, 40% of the content is plastic.

With the increase in the production and use of plastic, estimations indicate that the amount that reaches the environment each year will double by 2050.

In addition, the increase in the production of personal protective equipment is unprecedented. But we must add the fact that for a time the collection and classification of plastic waste was paralyzed in many countries due to strict confinement and social distancing measures.

At the time the article was published (late 2021), the demand for personal protective equipment exceeded the global supply. Masks have become the most sought-after utensil in almost the entire world, along with respirators with high filtration power, gowns, half-face respirators…

Another way the pandemic affected global plastic recycling is through falling oil prices. As we know, oil is the most important raw material in the production of plastic and therefore its price has a great influence on the price of plastic and the profitability of the entire recycling process. That is, the lower the price of oil, the lower the price of plastic and, therefore, the less profitable the recycling process becomes.

Considering all the information above, it is not surprising that the idea that turns out in our heads is that we must apply public policies and programs aimed at the urgent recycling of waste, especially plastics.

What are the strategies proposed by authors? In the first place, the deposit-reimbursement system, which implies the payment of a deposit for the purchase of a polluting product. This deposit can be refunded once the product or its waste is returned to the seller, or deposited at an established collection point. This system could encourage proper waste management and, therefore, recycling.

Another idea is subsidies and tax incentives. The tax system can be used to subsidize the use of recyclable products, while loans and subsidies can be used more broadly for the adoption of innovative waste management technologies. In addition, financial and technical support could be provided to recycling companies to facilitate the collection and processing of personal protective equipment.

There is also price differentiation. The possibility of using it as a tool to promote plastic recycling revealed the willingness of consumers to pay a higher price for products made from recycled plastics, which could then be used to finance the collection and transport of plastic waste, and reuse in recycling.

Until it is decided how and when some measure will be implemented, we must encourage, for now, people and companies, not to throw away, but to recycle, in order to try to reduce plastic waste as much as possible.

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.

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Barriers for diabetes and hypertension treatment: insights from behavioral economics. Behavioral Economics Club

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Friends of the Behavioral Economics Club, this week we present the paper “Barriers to hypertension and diabetes management in primary health care in Argentina: qualitative research base don a behavioral economics approach”, by Belizan, M.; Alonso, J. P.; Caporale, J.; Copo, M. G.; Sánchez, M.; Rubinstein, A. and Irazola, V. (2020), in which authors carry out a study to know which are the obstacles for the correct treatment of diabetes and hypertension in the Argentinian context.

The number of people who suffer from cardiovascular diseases increase every year, reaching the figure of almost 16.7 million deaths a year due to these causes. 80% of these deaths are produced in low-income countries. Nearly half of the deaths are of people under the age of 70.

Diabetes is also an important disease to pay attention to. In 2009, it was the seventh leading cause of death, with a mortality rate of 19.2 per 100,000 inhabitants.

Authors chose the Argentinian context to carry out their study, since it is their home country. The health system in the country is divided into three sectors: public health, social security and private health. The public health sector is made up of a network of public hospitals and primary care centers, and is financed by public sector revenues. Social security covers workers and is financed through their contributions. Finally, the private sector depends on payments from members.

In 2009, the Argentine Department of Health launched a program called REDES. It operates within the public sector and seeks to detect, classify and treat adults with hypertension and diabetes. In addition, it seeks to improve the provision of necessary health services in the Chronic Care model. This model focuses on the patient and facilitates the interaction between the patient and the medical team trained to provide high quality care.

Despite these efforts, many adults remain undiagnosed and therefore untreated. Despite the free provision of medications for hypertension and diabetes, some studies estimate that around 50% of patients receive their treatment.

According to the traditional neoclassical economic perspective, there are several factors that probably limit patients’ access to adequate care and treatment, such as those related to organizational aspects of the health system, to the provision of care, or to the beliefs and practices of doctors and users.

The behavioral economics approach can provide another perspective for the care model of chronic patients, given that not all barriers are rational or easily recognizable.

Major behavioral barriers include patients’ fear of health threats, lack of will, disregard for future risks, inaction due to lack of motivation, distrust, etc. Identifying these barriers can be useful to create a strategy based on behavioral economics, which has been shown to be effective when it comes to modifying behaviors related to other health problems.

The objective of this research, therefore, was to identify the main barriers in the prevention, detection and control of cardiometabolic diseases in primary health care settings of the Argentine public sector.

To do this, semi-structured interviews were conducted between March and December 2015 with users of the health system and professionals who worked in it.

The results gave rise to ideas such as that the most significant barriers at the health system level are related to how hospital care reaches users. Both patients and doctors highlight the lack of time to see patients, the shortage of human resources and the lack of equipment for diabetes and hypertension.

On the other hand, patients often require referral to a second level of care and follow-up when they have chronic diseases, and the lack of proper interaction between the primary and secondary services is a barrier that was identified in the study.

In addition, there have been cases where health care teams lack the necessary skills to manage chronic diseases, which is an obstacle to caring for these patients.

Many users are reluctant to know their real health status and understand that diabetes, for example, is a chronic condition that requires lifelong treatment. The bias of optimism and overconfidence appears, involving risk behaviors.

The present bias also appears when some patients are aware of the problems that all this may cause in the future, but do not make consequent decisions to improve them in the long term.

Authors believe that these findings demonstrate empirical evidence on the multiple barriers to managing chronic conditions in primary care settings. They also point out that the behavioral economics approach can be more effective and improve the treatment of these diseases.

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.

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