Read more: Inside the Nudge Unit
Should the government use behavioural science techniques to “nudge” us into making certain decisions? Or is “tricking” someone into doing something morally objectionable? A close study of what nudging entails shows that knee-jerk rejection of government interference in our lives is inappropriate when it comes to this issue—and that, frankly, we're immensely privileged to be worrying about nudging at all.
Governments do things all the time to influence our behaviour. For example, George Osborne, Chancellor of the Exchequer, announced last week he would be introducing a sugar tax. Drinks with high sugar content are to have a tax placed on them in the hope this will discourage us from consuming so many of them, or nudge the companies making them into changing their formulae, therefore improving the nation’s health.
Financial incentives of this kind were talked about at a recent event called "Smart Britain: Energising Consumers," hosted by Smart Energy GB. This organisation was set up by the government in 2013 to communicate the benefits of “smart meters,” which display how much money households are spending on their energy to nudge them into using less.
In a broad discussion about nudging chaired by Smart Energy GB’s Chief Executive Sacha Deshmukh, the Financial Times’s “Undercover Economist” Tim Harford discussed policies which aimed to influence behaviour through monetary incentive. We would expect these to be effective, sure, but might not know just how effective they can be. When Australia introduced a “baby bonus” in 2002—which gave $2500 (later $3000) to those having children in a bid to increase the country’s birth rate—something fascinating happened. Harford explained that in the two weeks before the bonus kicked in, the birth rate plummeted, but the day the bonus kicked in, it doubled. Women had been “holding on” in anticipation of it. The financial incentive meant they actually delayed childbirth. Whether the sugar tax will have the desired effect remains to be seen, but taxes and bonuses can certainly work in principle.
When it comes to nudges, though, it’s trickier. David Halpern, Chief Executive of the Behavioural Insights Team (nicknamed the “Nudge Unit,” set up by the government in 2010 to nudge the public into behaviours that lowered the financial strain on public services), discussed the ways in which his Unit has helped increase the amount of income tax raised in the UK. It did this by sending letters telling people that their neighbours had already paid their taxes. The results of this were unexpected. On the whole, the measure proved extremely effective: it raised £30m extra in that year. However, it had no effect whatsoever on those owing the biggest 1 per cent of tax debts. The Unit experimented, and found that this group responded best to a different type of letter: one explaining the services that their tax money would be spent on. Harford and Helpern stressed the importance of experiments in working out which nudges work best.
Nudging can cause wide-scale behaviour change. Through various methods—such as communicating to people how others in their area are behaving, or asking how people would feel if others behaved as they did—the Unit claims to have persuaded 20 per cent more people to consider switching energy provider and signed up 100,000 extra organ donors per year.
But is it morally problematic? The news that more people are paying their taxes is great. But is it wrong to achieve that result through the methods developed by the Unit? What about forms of nudging that involve deception of a kind? For example, if the government mandates that fruit be placed at eye level in shops, so that customers are more likely to buy it than sweets and chocolate, is that acceptable? We will be healthier, but have we been “tricked?”
The deception involved in such instances of nudging is surely a bad thing. Supermarkets “trick” us into buying certain products all the time, of course, but we intuitively hold our governments to a higher standard of truthfulness than we do shops. The idea of the government manipulating us is unpalatable. Is that a hit worth taking if nudges help us, or society, in the long-run?
If the issue is presented like this, it is highly debatable. However, this picture misses out one key fact. We do not know when we’re being nudged, but we do know that we will be nudged—Halpern’s Unit wasn’t set up in secret. The government does not alert us each time we are being nudged, but it doesn’t hide the fact that sometimes, under some conditions, we will be. This adds a layer of truthfulness to the proceedings. Once you factor that in, nudging seems more acceptable.
Whichever side of the debate we fall on, we should think ourselves grateful that it is a debate worth having for us. Even if nudging is unacceptable, it is clearly not a horrific violation of our personal freedoms. We should be grateful that, in a world where some governments ban books and arrest their citizens for blasphemy, we can afford to bicker about nudging.
Should the government use behavioural science techniques to “nudge” us into making certain decisions? Or is “tricking” someone into doing something morally objectionable? A close study of what nudging entails shows that knee-jerk rejection of government interference in our lives is inappropriate when it comes to this issue—and that, frankly, we're immensely privileged to be worrying about nudging at all.
Governments do things all the time to influence our behaviour. For example, George Osborne, Chancellor of the Exchequer, announced last week he would be introducing a sugar tax. Drinks with high sugar content are to have a tax placed on them in the hope this will discourage us from consuming so many of them, or nudge the companies making them into changing their formulae, therefore improving the nation’s health.
Financial incentives of this kind were talked about at a recent event called "Smart Britain: Energising Consumers," hosted by Smart Energy GB. This organisation was set up by the government in 2013 to communicate the benefits of “smart meters,” which display how much money households are spending on their energy to nudge them into using less.
In a broad discussion about nudging chaired by Smart Energy GB’s Chief Executive Sacha Deshmukh, the Financial Times’s “Undercover Economist” Tim Harford discussed policies which aimed to influence behaviour through monetary incentive. We would expect these to be effective, sure, but might not know just how effective they can be. When Australia introduced a “baby bonus” in 2002—which gave $2500 (later $3000) to those having children in a bid to increase the country’s birth rate—something fascinating happened. Harford explained that in the two weeks before the bonus kicked in, the birth rate plummeted, but the day the bonus kicked in, it doubled. Women had been “holding on” in anticipation of it. The financial incentive meant they actually delayed childbirth. Whether the sugar tax will have the desired effect remains to be seen, but taxes and bonuses can certainly work in principle.
When it comes to nudges, though, it’s trickier. David Halpern, Chief Executive of the Behavioural Insights Team (nicknamed the “Nudge Unit,” set up by the government in 2010 to nudge the public into behaviours that lowered the financial strain on public services), discussed the ways in which his Unit has helped increase the amount of income tax raised in the UK. It did this by sending letters telling people that their neighbours had already paid their taxes. The results of this were unexpected. On the whole, the measure proved extremely effective: it raised £30m extra in that year. However, it had no effect whatsoever on those owing the biggest 1 per cent of tax debts. The Unit experimented, and found that this group responded best to a different type of letter: one explaining the services that their tax money would be spent on. Harford and Helpern stressed the importance of experiments in working out which nudges work best.
Nudging can cause wide-scale behaviour change. Through various methods—such as communicating to people how others in their area are behaving, or asking how people would feel if others behaved as they did—the Unit claims to have persuaded 20 per cent more people to consider switching energy provider and signed up 100,000 extra organ donors per year.
But is it morally problematic? The news that more people are paying their taxes is great. But is it wrong to achieve that result through the methods developed by the Unit? What about forms of nudging that involve deception of a kind? For example, if the government mandates that fruit be placed at eye level in shops, so that customers are more likely to buy it than sweets and chocolate, is that acceptable? We will be healthier, but have we been “tricked?”
The deception involved in such instances of nudging is surely a bad thing. Supermarkets “trick” us into buying certain products all the time, of course, but we intuitively hold our governments to a higher standard of truthfulness than we do shops. The idea of the government manipulating us is unpalatable. Is that a hit worth taking if nudges help us, or society, in the long-run?
If the issue is presented like this, it is highly debatable. However, this picture misses out one key fact. We do not know when we’re being nudged, but we do know that we will be nudged—Halpern’s Unit wasn’t set up in secret. The government does not alert us each time we are being nudged, but it doesn’t hide the fact that sometimes, under some conditions, we will be. This adds a layer of truthfulness to the proceedings. Once you factor that in, nudging seems more acceptable.
Whichever side of the debate we fall on, we should think ourselves grateful that it is a debate worth having for us. Even if nudging is unacceptable, it is clearly not a horrific violation of our personal freedoms. We should be grateful that, in a world where some governments ban books and arrest their citizens for blasphemy, we can afford to bicker about nudging.
