Friends of the Behavioral Economics Blog, this week we present the paper “Depression and financial planning horizon”, by Choung, Y.; Chatterjee, S. and Pak, T. Y. (2022), in which authors carry out a study with people from different generations to understand how suffering from depression affects the decisions we make in the financial context. 

Recent observations and studies have pointed, in recent years, to altered reward processing in people living with depression, considering that hopelessness is part of the clinical picture of the disease.

Depressed mood is often also associated with a lack of positive expectations, which may affect people’s motivation to invest in the future. 

That is, empirical evidence suggests that people with depression often do not accept future rewards compared to people without mental health difficulties.

Of these future rewards, most are financial. And one way to measure and organize personal finances is the so-called “financial planning horizon.” That is, the prospective period according to which people organize their savings and spending programs. An example of this is taking out a retirement plan, which would indicate a very broad and long financial planning horizon over time.

While most people look to the future with a certain amount of optimism, this is often not the case for people with depression. And because studies consider that a large number of factors affect the financial planning horizon, such as, for example, individual health or personality, authors found it interesting to investigate the role of depression in this context.

Approximately 17.3 million adults in the United States have experienced one or more major depressive episodes since 2017. Moreover, the number of depressed adults who reported unmet needs in the treatment of their illness has been progressively increasing over the past 10 years in that same territory.  

Given the increasing prevalence of depression and its potential economic consequences, there is a growing need to understand how the symptoms of this illness affect financial decision making. 

The most recent evidence suggests that depressive symptomatology is related to temporal discounting and risk aversion. That is, on the one hand, it is possible that depression influences the time frame in which people schedule their savings and spending, because they may prefer immediate rewards to those for which there is a wait; and on the other hand, depression may influence people’s propensity to make risky decisions because it alters their personality traits and behavior. That is this issue that interests the authors and on which they try to shed light. 

Some articles on the subject show that there are a number of changes in time preferences for rewards after experiencing traumatic experiences such as natural disasters or armed conflicts. These events result in stress, which, in general, is an important precursor of depression.

To study all these ideas, authors used a sample composed of five different cohorts of people born between 1931 and 1959. A series of scientifically valid scales common in psychology were used to assess depressive symptoms. In addition, questions related to the financial area were asked.

Authors’ results suggest that people with depression are more likely to focus their financial planning on the short term. Moreover, it appears that these differences in relation to the rest of the population were driven not only by depression, but also by pessimism, poor perceived control, smoking, alcohol consumption, lack of exercise….

Overall, the results point to a strong association between depressive symptoms and a shorter financial planning horizon. This may be explained by the pessimistic outlook of those living with this disease, as well as by the underestimation of the years that the ill person considers he or she has left to live, which is further reduced if depression is accompanied by deteriorating physical health or cognitive losses. 

Authors hope that further studies on depression and how it affects the normal development of life will be carried out, with the aim of intervening and improving the negative symptoms. 

For example, they propose the creation of affordable financial planning services, so that anyone can access them and, thus, make it easier for everyone to manage their finances in a healthy and forward-looking way. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Friends of the Behavioral Economics Blog, this week we present the paper “The longitudinal interplay between attention bias and interpretation bias in social anxiety in adolescents”, by Henricks, L. A.; Lange, W. G.; Luijten, M.; van den Berg, Y. H. M.; Stoltz, S. E. M. J.; Cillessen, A. H. N. and Becker, E. S. (2022), in which authors carry out a study to know whether the attention bias and the interpretation bias are related to social anxiety in teenagers, and if so, how. 

Social anxiety is closely related to the fear of being negatively evaluated by others and is often accompanied by avoidance of social situations. This type of anxiety has its onset in childhood, but symptoms increase during adolescence.

Young sufferers experience serious socioemotional consequences, such as an increased risk of peer victimization, depression and even substance abuse. Therefore, early detection and treatment are extremely important, highlighting the need to devote efforts and resources to research into the factors that contribute to the onset and maintenance of social anxiety. 

Many cognitive models assume that biased cognitive processing is a very influential factor. Especially, negative attention bias (that is, the tendency to pay more attention to negative stimuli) and negative interpretation bias (the tendency to negatively interpret ambiguous social situations) would increase the risk of experiencing social anxiety symptoms in children and adolescents. 

One of the existing studies showed that adolescents with a negative interpretation style are at increased risk for social anxiety. However, longitudinal evidence on the role of negative attention bias and negative interpretation bias is still lacking. 

At the same time, most studies in young population investigated the effects of these biases on social anxiety ignoring the fact that both may be related or interact with each other. 

To overcome these limitations, the study in the article focuses on the interaction between attention bias and interpretation bias, and examines the longitudinal predictive ability of cognitive biases on social anxiety in adolescence. 

Adolescence is a period that may be critical for the development of cognitive biases as a result of sociocognitive maturation. Adolescents, at this stage of life, become able to think and reason abstractly and develop metacognitive beliefs.

In some previous studies it was seen that negative interpretation bias is apparently related to an increased risk of experiencing anxiety symptoms, including social anxiety. 

On the other hand, attention bias is a complex phenomenon consisting of multiple components. For example, it is characterized by increased engagement with threat, as socially fearful individuals are quicker to detect negative stimuli in an environment. It is important to understand this point because of the multifactorial nature of these biases. 

In this study, the aim was to examine both attentional and interpretation biases and their components, all through a visual search task in which participants had to detect or ignore a social threat. 

The combined bias hypothesis is also considered, as the authors believe it possible that attentional bias and interpretation bias are related and influence each other. 

For this purpose, data from 2017, 2018, and 2019 were gathered. A total of 816 young people from different grades of secondary education, in the context of the Netherlands, participated. 

A visual search task was created with images of adolescent faces expressing different emotions. The participants had to point out those they found threatening and neutral. 

It seems that attentional bias is not as closely related to social anxiety as authors predicted. However, the greater the negative interpretation bias, the greater the tendency to suffer from social anxiety.

Future research could examine how these biases behave in stressful situations, to find out how they would influence young people’s behavior in borderline situations. 

In addition, it appears that there is also no consistent or solid relationship between the two biases. This may be because it does not really exist, or because there are methodological difficulties in measuring this relationship. 

In any case, the authors recommend improving the tasks focused on the study, especially, of the attention bias in adolescents; in addition to studying the role of the different cognitive processes and how they relate and interact with each other when it comes to predicting the tendency to suffer from social anxiety. 

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Friends of the Behavioral Economics Blog, this week we present the paper “Revealing differences in brand loyalty and brand engagement of single or no parented young adults”, by Morkunas, M. (2022), in which the author carries out an investigation to know whether adverse circumstances such as parental divorce or a context of orphanhood would affect the consumer behavior of adolescents and young adults.

Central and Eastern European countries are characterized by a high number of divorces. This is a circumstance that places children in an insecure social position, which is amplified by numerous factors, such as possible financial fragility, intolerance or bullying in schools. 

On the other hand, the number of children raised in single-parent families, or even by relatives, increased significantly in some countries in this part of Europe after joining the European Union. 

It has been shown that the prolonged absence of at least one parent has a significant impact on the socio-psychological development of the child at various levels. For example, the situation affects the maturation of their character, their cognitive abilities, and even the economic rationality of their actions.

However, although there are indications to think that people who have grown up in families with these circumstances may have different behaviors than people with typical situations, no substantial scientific efforts have been made to reveal the impact of orphanhood, single parenthood, or divorce on consumer behavior. Therefore, this article aims to help reduce that gap in the literature.

In general, it is considered that the longer a person lives, the more he/she adjusts to the environment around him/her, and forms his/her habits according to the existing social norms and rules, showing a behavior of social conformity. Then, in order to better understand the effect of the lack of a parent during childhood on consumer behavior, the scope of the study focused on young adolescents, who have been exposed to this phenomenon of social conformity for some time.

It is important to know three concepts: brand engagement (BE), brand loyalty (BL), and brand evangelist, which could be understood as a person who feels devotion to the brand and communicates it to the world. 

In general, it is assumed that brand engagement (BE) is directly related to brand loyalty (BL), the latter being considered more complex. However, there are many experts who consider BE to be the more important of the two concepts. When studying brand satisfaction, it seems that identification with the brand through value congruence is one of the most important points that most affects BE and BL.

On the other hand, other experts consider that brand-based consumer interactions are also a highly relevant antecedent for these two concepts. 

BL is typically seen as one of the most important parts of brand evangelism, although other experts point to brand satisfaction and experience as the most relevant components. 

It is important to briefly understand these data to better interpret the results of the study, which can be viewed in detail in the original article. 

The data needed for the study were collected in two processes. First, a control group was recruited through an online questionnaire shared through social networks. On the other hand, data for the study group were obtained through social support divisions of five Lithuanian municipalities and other organizations in the area that provide social support to people with complicated social situations. 

In total, 341 people were surveyed for the control group and 224 for the study group. 

The results showed that there appeared to be statistically significant differences between the two groups. 

Adolescents who experienced a childhood in a single-parent family, in an orphaned situation or, in general, with the absence of one or both parents, are more prone to emotional connectivity with their favorite brands. This should lead to higher satisfaction or higher perceived quality of these brands, as high emotional connectivity is considered an indicator of both. 

On the other hand, although they show some emotional attachment to the brand, they are rarely inclined to spread their positive opinion about it, which is interesting, because if the person loves the brand, he or she is more willing to speak positively about it, even if only moderately. 

The author believes that these findings can be considered relevant not only for Central and Eastern Europe, but for all countries where labor migration is an important issue, with a considerable social, economic and cultural footprint and high divorce rates. Furthermore, he urges other experts to continue to study the subject in order to draw even more solid conclusions.

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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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Friends of the Behavioral Economics Club, this week we present the paper “Predictors of Counseling Participation Among Low-Income People Offered an Integrated Intervention Targeting Financial Distress and Tobacco Use”, by Tempchin, J.; Vargas, E.; Sherman, S. and Rogers, E. (2022), in which authors carry out a study in which they propose a special method to reduce tobacco addiction, in which they combine concepts like financial education, health and long-term objectives.

Smoking was first identified as a public health threat in the United States almost 60 years ago. Since that time, tobacco addiction and the number of people who occasionally smoke a cigarette has declined by almost 30%. 

However, smoking rates among people with low or very low incomes remain high. 

Currently, people over 18 years of age living at or below the poverty line are twice as likely to smoke as those who have better economic conditions. 

Part of this may be because people with a wealthy and stable economic situation can afford access to personalized and effective treatment to overcome their tobacco addiction.

Although several interventions have been shown to be effective in the short term, there are many that fail in the long term for those at greatest risk and vulnerability. 

Having a low income is usually an indicator of more complex problems. One of these is poor financial health or education. This is a social determinant and actually affects many more areas of life apart from people’s economic status. It is someone’s ability to manage their expenses, cover their needs, minimize and recover from financial crises, minimize their debts and generate wealth. 

Poor financial health or training is associated with poor physical and mental health, overall well-being, and is one of the greatest sources of chronic stress among adults in the United States. 

In people with lower incomes, stress in general and financial stress in particular, are very significant barriers to long-term smoking cessation. 

In addition, behavioral economics research suggests that financial deprivation induces people to focus on their most immediate and survival needs, leaving them without the emotional and cognitive resources necessary to resist immediate gratification and prioritize goals that are deferred and whose benefits will be seen in the non-immediate future, such as quitting smoking. 

Interventions with financial incentives are quite common in studies in the field of behavioral economics and generally have a positive effect. That is, providing a temporary monetary reward for quitting smoking is effective in increasing abstinence rates in the short term. 

But what about the long term? Small monetary rewards for quitting smoking do not remedy structural financial difficulties, nor do they help people not to return to the addictive habit over time.

A trial has been conducted this past year that demonstrated that a smoking cessation intervention incorporated money management training and education and, although only half of the people enrolled attended the sessions, 85% of them completed the training and were successful in quitting smoking

Based on this trial, authors decided to conduct a similar study themselves, involving 208 New York adults with household incomes below the federal poverty line who had smoked at least one cigarette in the past 30 days.

Up to nine individual counseling sessions in financial education were offered, and all participants also received a program that included smoking cessation training.

The results showed that the rate of attendance at the interventions, and the success of the interventions, increased as the age, education and income of the participants increased. This finding is of concern, because then, the younger people are, the less education they have, and the lower their income, the greater their likelihood of having a tobacco addiction. In other words, when vulnerability increases, the risk of smoking increases. 

On the other hand, it seems that other factors such as being an immigrant, having high levels of psychological distress or anxiety disorders, being unemployed, having low levels of literacy, or very little motivation to quit smoking also contributed to increase the risk of addiction. 

Authors point out the need to devote more efforts and resources to research on smoking, since, as we have pointed out in the first lines, it is one of the most serious health problems that currently affects millions of people around the world.

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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. 

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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. 

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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.

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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