How behavioral economics can improve well-being
We had an incredible experience last month with the opportunity to present groundbreaking new research at the World Economic Forum (WEF) Annual Meeting in Davos, Switzerland. The peaceful backdrop and healthy mountain air was the perfect environment in which to share and collaborate on how to help people get and stay healthier – specifically through positively changing behavior within the human-centric health ecosystem.
Non-communicable diseases (NCDs), including:
Five risk factors — tobacco use, unhealthy diet, inadequate exercise, indoor and outdoor air pollution, and excessive alcohol use — cause a substantial portion of NCDs, but as employers, we struggle to help people change their behaviors.
We can use “behavioral economics” to help improve our health
Human beings make decisions using a series of mental shortcuts, or heuristics. That’s lucky, because we would be paralyzed if we had to carefully consider every single decision, every hour, every day.
But we make these decisions using a primitive portion of the brain that evolved in prehistory when humans led brutishly short lives on the edge of protein-calorie malnutrition and were frequent prey of animals higher on the food chain. Many of these mental shortcuts encourage us to eat too much or to go for pleasure today regardless of the consequences.
But we are learning that we can use the way our brains are hardwired to help improve our health.
Here are a few of these shortcuts, often clustered under the heading, “behavioral economics.”
Present bias helped us, in prehistoric times, to be sure to get the calories we needed. In modern times, present bias makes us likely to overeat in a calorie-rich world. We can urge people to stop smoking in the future (not today), and they are more likely to make such a commitment
Loss aversion helped us protect what we already had in prehistory, but makes us hoarders today. Charging a tobacco surcharge on insurance premiums can help motivate people to quit smoking.
Optimism bias helped our prehistoric ancestors get out of the cave in the morning to face an uncertain day, but now encourages us to believe that we won’t fall ill as a result of our behavior. We use the optimism bias when we offer raffle tickets for program participation.
Availability means that we remember powerful narrative stories better than dry statistics, so we should influence through storytelling and not just rely on numbers.
Organizations can use behavioral economic precepts to design optimal programs to encourage good health
Status quo bias means that we tend not to make active decisions if there is an opportunity to avoid decision-making. Hence, we should make the default the most socially desirable choice, and celebrate when few people actively reject the default.
Virality of behavior shows that both bad behaviors (smoking and obesity) and good behaviors (regular exercise) tend to track social networks closely. We can use our social networks to reinforce healthy behavior.
We identified companies and organizations all over the world that are using behavioral economic precepts to encourage decreased risk factors and design optimal programs to encourage good health.
Many of our case studies focused on “choice architecture,” making the best choice an easy one. For instance:
Many programs are most effective when they include a social support element
We also found organizations that were effectively leveraging social networks to help improve health behaviors. Latin American and American cities have blocked urban roadways on weekends to encourage increased activity, and programs to prevent or treat diabetes around the globe are most effective when they include a social support element.
Finally, we found organizations that used the availability heuristic by sharing compelling stories to encourage healthier behavior. These included programs encouraging increased physical activity and better nutrition.
We also found opportunities to use technology as a multiplier for these precepts.
The implications for employers, governments, and nongovernmental organizations are clear. We can help improve health and increase global productivity by using the nudges of behavioral science to tailor our efforts to the way our brains make automatic decisions.
Speaking last month was just the tip of the iceberg, so to speak. We’re excited about the potential that these research findings uncover, and the opportunity to work with others to make them a reality.