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«EASY ATTRACTIVE TIMELY SOCIAL EAST Four simple ways to apply behavioural insights Owain Service, Michael Hallsworth, David Halpern, Felicity Algate, Rory ...»

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Box 2.3: Increasing response rates of doctors by attracting the attention of a specific group The Behavioural Insights Team ran a trial with HMRC to test the effectiveness of different letters aimed at encouraging doctors to pay any outstanding tax liabilities. In November 2011, around 3,000 doctors were sent one of four different types of letters.

One group received a generic HMRC letter, of the kind anyone (regardless of their profession) would receive. The second group received letters in the style that HMRC might usually send to a specific group, emphasising that it was a campaign focused on doctors. The third was a much simpler letter — being shorter and more direct in tone. It also suggested that failure to come forward was previously treated as an oversight, but would now be treated as an active choice by the recipient. The fourth was identical but contained an additional moral message (which pointed out that a recent poll showed that most people trust their doctor to tell the truth).

Simply emphasising that the letters were targeting a particular group through a specific campaign had a considerable impact — raising response rates by more than five times. Simplifying the message also had a strong effect above and beyond the focus on the specific group.

% Response rates of doctors to HMRC letters

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Box 2.4: Using a clear call to action stamp to improve payment rates of fines BIT is working with New South Wales’ Department of Premier & Cabinet and Office of State Revenue to run trials to improve payment rates across a range of fines, debts and taxes.

A number of fines trials involved testing the use of a ‘stamp’ to provide a clear call to action for recipients. One of these trials involved ‘Enforcement Orders’, which are issued to those people who have failed to respond to a Penalty Notice and Penalty Reminder Notice for fines ranging from traffic and parking infringements to civil disorder offences.

A red ‘Pay Now’ stamp was printed in a prominent position on letters in the trial group, alongside a number of other changes to make the messaging more salient. Over a sample size of 48,445 letters, there was a 3.1 percentage point increase in payment rate in the trial letters compared to the standard notice (see graph below). When rolled out to scale, this translates to AUD$1.02 million in additional payments for the NSW Government, as well as 8,800 fewer vehicle suspensions, which has wider socio-economic benefits for the community.

Enforcement orders trial

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2.2 Design rewards and sanctions for maximum effect It is no secret that individuals are more likely to undertake a particular action if they have an incentive to do so. Governments have often used financial incentives to motivate behavioural change, both in the form of taxes and fines to discourage particular activities (for example, taxing cigarettes), and tax subsidies and grants to encourage others (for example, to encourage saving or insulation).

There is good evidence that financial incentives work in many instances.

However, the Behavioural Insights Team believes that there are many alternative ways of structuring financial incentives to maximise their effectiveness.

These include:

· The use of lotteries. We have a tendency to focus more on the size of the prize at stake, rather than our chances of winning it. Therefore, rather than rewarding everyone equally (e.g. £100 for anyone takes up a scheme), it may be cheaper and more effective to reward fewer people with a much larger reward (see Box 2.5 on electoral registration).

· Focusing on the scarcity of a product or service. Robert Cialdini has pointed out that we are much more attracted to something if we think supplies are limited. A famous example is that sales of beans increased after a sign saying “Maximum five per customer” was introduced. Policy makers could point out where an offer is only available for a certain time, only open to certain people, and where there is competition amongst these people for places.

· Drawing attention to self-image. We have a powerful desire to maintain a positive self-image. Therefore, the potential gain from feeling or looking good can be a powerful incentive. Note that this desire may not be conscious.

For example, a US study showed that more people voted if they were asked “How important is it to you to be a voter in the upcoming election?” as opposed to “How important is to you to vote in the upcoming election?” The success of the first message came through relating the action to a person’s essential qualities and self-image.18 · ‘Gamifying’ activities. The advent of new technologies, particularly the use of mobile phone apps, has seen a rapid increase in ‘gamification’ — using games to engage users in achieving objectives. The incentives here are often virtual (competition against others in your social network), but can also take the form of tangible rewards – for example the Incentives for Singapore Commuters scheme rewards commuters for moving from peak to off-peak trains.

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Box 2.5: Using a lottery to increase electoral participation rates Lotteries or prize draws can be highly cost-effective ways of incentivising people, since individuals tend to focus more on the size of a prize than their chances of winning it. Traditional incentives or subsidies, by contrast, are usually divided up between many people, which means there is not a single large amount to attract attention.

The Behavioural Insights Team ran a randomised controlled trial with a local authority to test the efficacy of using lotteries to increase electoral registration rates. There was a 3.3% increase in registration rates when the prize was £1,000, and a 4.2% increase when the prize was £5,000.

Electoral registration lottery The lottery is a good illustration of how prize draws can increase registration rates in more cost-effective ways than the alternative of knocking on people’s doors.

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There is also a case for considering ‘incentives’ more broadly that we normally do. The processes for carrying out a behaviour can make it more or less attractive, quite apart from the end reward on offer. For example, it has been shown people are more honest when responding to survey questions about their drinking through text messages than a phone interview.19 But the most attractive process may not be obvious: in fact, the researchers thought a text message would be less attractive, because it leaves a persistent record of the answer.

Again, this shows the importance of testing, learning, and adapting.

Behavioural Pitfall 1: When financial incentives backfire While financial incentives can encourage a behaviour, they can also backfire. Offering money can undermine the other reasons that people may have for acting a certain way. When, for example, residents of a small Swiss town were asked if they would agree to a nuclear waste facility being built nearby, just over half agreed. This is despite a third of them believing that at least some residents would die from contamination as a result.20 The academics conducting the study then asked the same question, with one difference. They said that the Swiss Parliament would compensate local residents for accepting the facility (the amount offered varied between $2,175 and $6,525). Now, when the residents were asked this question, acceptance levels fell from over 50.8% to 24.6%. What had previously been seen as a matter of civic duty had been transformed into a simple issue of taking money. Adding a financial incentive had damaged, not enhanced, the residents’ intrinsic motivation. Financial incentives should therefore be used with care.

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3. Make it Social Humans are social animals. We are heavily influenced by what those around us do and say. We reduce our energy consumption when we know that others in similar households use less energy than we do. We are more likely to take the stairs rather than the lift when our colleagues do the same.

We pay a premium for products or services that have been endorsed by other people, which is why online rating systems are so successful.21 And when we have told someone else that we are going to do something, we feel much more obliged to see it through.

These social influences often go unnoticed. Knowing how they operate can help policy makers design more effective interventions (and work out pitfalls

to avoid). To incorporate social factors we should:

 · Show that most people perform the desired behaviour  · Use the power of networks  · Encourage people to make a commitment to others

3.1 Show that most people perform the desired behaviour Social norms are the values, actions and expectations of a particular society or group. Social norms offer (often implicit) guides to our behaviour.22 ‘Descriptive norms’, which make people aware of what most other people are doing, can reinforce individuals’ underlying motivations.

Behavioural science offers many examples of how social norms have been effective in encouraging recycling, energy and water efficiency, and reducing

littering.23 Examples of trials that demonstrate this in practice include:

· The Behavioural Insights Team and HMRC have run a series of trials where including factual statements that most people had already paid their tax increased tax payment rates (see Box 3.1).24 · The Behavioural Insights Team ran a trial with the Co-op Legal Services showing that explaining that many people like to give money to charity in their wills increased donation rates from 9% to 13% (see Box 3.2).

· A series of trials run by the energy company OPower in the US have shown that comparing household energy use to an efficient neighbour can reduce overall energy usage by 2-4%.25

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Box 3.1: Social norms to increase tax payments The Behavioural Insights Team and HMRC tested various social norm messages against a control letter (which contained no social norm) in letters to 100,000 Self Assessment tax debtors.26 In the graph below, the ‘local norm’ letters pointed out that the great majority of people in the recipient’s local area had paid on time (but the area was not referred to by name); the ‘debt norm’ pointed out that most people with a debt like theirs had already paid. The ‘local and debt norm’ combined these two messages.

As the graph shows, the messages became more successful as they featured more specific norms. The message that combined the local and debt norm increased payment rates by five percentage points (15% in relative terms) and led to £1.2m more being paid in the first month than the control. Overall, the use of these and similar messages brought forward £210m of tax revenue in the 2012/13 financial year. HMRC and the Behavioural Insights Team were awarded the 2013 Civil Service Award for Innovative Delivery for this work.

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Box 3.2: Encouraging charitable giving in wills The Behavioural Insights Team partnered with Co-operative Legal Services to test whether social norm messages in telephone scripts could be used to encourage people to donate more to charity in their wills.27 When customers rang to book a will-writing appointment, they were randomly assigned to a will-writer, who would write their will with them

over the phone. Customers were either:

· Not asked if they would like to donate money to charity in their wills (this is the control condition);

· Asked the simple question ‘Would you like to leave any money to charity in your will?’ (we call this the ‘Just Ask’ condition); or · Told that ‘Many of our customers like to leave money to charity in their will’. Hey were then asked ‘are there any causes you’re passionate about?’ (we call this the ‘Social Passion Ask’ condition).

In the ‘Just Ask’ group, 10% of customers chose to leave a gift to charity in their wills. But in the ‘Social Passion Ask’ group, donation rates rose threefold to 15%, illustrating the power of social norms.

Furthermore, the average donation among people in the ‘Social Passion Ask’ group is twice as large (£6,661) than those in the control (£3,300) or ‘Just Ask’ group (£3,110).

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Proportion leaving a legacy gift Behavioural Pitfall 2: When social norms backfire Policy makers should be wary of inadvertently reinforcing a negative social norm by emphasising the prevalence of an undesirable behaviour. In their well-intentioned desire to highlight important issues, policy makers can sometimes inadvertently communicate that the ‘problem behaviour’ is relatively widespread. This signals to people that, even if we don’t like or approve of the behaviour, lots of other people are doing it. The result can be an increase in the problem behaviour. Robert Cialdini, Professor of Psychology and Marketing at Arizona State University, calls this inadvertent signaling the “big mistake” authorities make.28

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3.2 Use the power of networks We know that giving information about social norms in the aggregate can be powerful. However, we are also embedded in a network of social relationships, and those we come into contact with have a powerful influence on our behaviour.

Most of these networks develop organically and, once established, they are likely to develop their own dynamics. In particular, we know that people have a strong instinct for reciprocity and mutual support, so these may well develop within the network.29 When networks already exist, the main role for government and other

organisations is likely to be supportive, for example by:

· Protecting the integrity of consumer feedback and other private sector online comparison sites. Organisations like TripAdvisor, Yelp and eBay have successfully allowed product and service evaluations to be distributed through a network of consumers. The increased feedback influences providers to improve their offer, since higher ratings translate into higher rewards.30 · Supporting collective purchasing and collaborative consumption. The Which?

Big Switch created a network of people who wanted to find a better energy deal: 287,365 people signed up and over 37,000 people switched to a better deal with an average saving of £223 a year.

· Providing structures to let people direct their natural instinct for reciprocity.

Reciprocity messages are helping to add 100,000 people to the Organ Donor Register every year (see Box 3.3). Similarly, Care 4 Care is a network built around reciprocity: it allows people who help elderly others to ‘bank’ that time so they get it back in the form of care for themselves when they get old.31 Finally, networks also allow behaviours to spread. For example, a US study found that visiting a house to encourage someone to vote meant they were 10% more likely to do. This shows the power of influence. However, the people who lived at the same address who did not answer the door were around 6% more likely to vote as well. This shows the power of networks: a significant proportion of the ‘influence’ was passed on via a social network.32

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Box 3.3: Encouraging people to join the organ donor register using reciprocity The Behavioural Insights Team recently collaborated with the Department of Health, the NHS, the DVLA and the Government Digital Service on a trial to increase organ donation.33 When people renew their car tax online, they receive a message asking if they want to join the organ donor register.

For one month in 2013, eight different messages were introduced to encourage sign up, and visitors were randomly allocated to each. Since over 1 million people visited the site during the month, this represented one of the largest randomised controlled trials in the public sector.

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