This article originally appeared in [https://blog.nature.org/science/2014/04/26/environmental-sustainability-nudges-economics-paul-ferraro/] and belongs to the creators.
Behavioral “nudges” to achieve social policy objectives are all the rage — and with plenty of evidence to back up that enthusiasm. So why aren’t they being used more by conservationists?
Based on insights from behavioral economics and psychology, nudges attempt to subtly change the environment in which people make decisions to help them make better choices — better for themselves and for society.
One example: People are notoriously biased toward the present and routinely fail to make beneficial longer-term investments. But governments and corporations have found that they can induce citizens and customers to make such investments by making small changes in their decision environments — such as helping people to set goals or to create ways of making it more costly to themselves to deviate later from their investment plans.
Examples of effective nudges
A wide range of effective nudges is now at work in the world, developed by partnerships of scientists, practitioners and policymakers. Among these are:
(1) “Commitment devices” that help people make decisions that conform better to their long-term goals.
For example, people all over the world have trouble saving money — their present selves always seem to take precedence over their future selves. In randomized controlled trials, people save more when they have access to bank accounts that make it easy to put money in, but difficult to take it out — keeping you from your money turns out to be desirable product attribute (Brian et al., 2010).
(2) Subtle changes in default options and the framing of decisions.
For instance, changing the default in organ donation systems or voluntary retirement account programs from “opt in” to “opt out” dramatically changes participation rates, despite only changing what box people must check on a form.
(3) Applications of norm-based messaging, goal-setting and technology that reduces decision costs.
For example, showing people in the United States and in South Africa how their water or energy use compares to others in their community reduced water and energy use by up to 5% in randomized controlled trials (Ferraro & Price 2013). Allowing people to set voluntary (non-binding) energy reduction goals made them more likely to save energy. Offering an attic clearance service in Britain at full cost made people five times more likely to adopt attic insulation than did subsidies for attic insulation.
Governments getting involved
The U.K. government has even set up a Behavioral Insights Team (BIT) — which is often referred to as “The Nudge Unit” — to find and quickly disseminate behavioral nudges for public policy. The BIT was so successful in identifying effective policy interventions that, just three years after its creation, it is being spun off to become a private-public partnership. Seeing the BIT’s success, the U.S. federal government is now establishing its own behavioral unit within the executive branch.
We could be incorporating tests of behavioral nudges in a wide range of our conservation programs at little cost — and with the potential for developing a set of best practices that can contribute to environmental and poverty alleviation goals. – Paul Ferraro
But despite the rapid growth of behavioral nudge applications in a wide range of social policy fields, such applications have largely been ignored by the conservation community. Environmental practitioners and policymakers focus on shoves rather than nudges — perhaps because of the scale of environmental problems or the sense of crisis around these issues, perhaps because nudges might seem to be a fad.
The potential for nudges in enviro-policy
However, nudges have three characteristics that merit a closer look by environmentalists and conservationists:
(1) A solid and growing evidence base that they can change policy-relevant behaviors;
(2) Inexpensive implementation, which implies that even if their behavioral impacts are small, they can be cost-effective contributors to solving social problems; and
(3) An ability to be piloted in inexpensive randomized controlled trials, which makes it much easier to evaluate their effectiveness and thus build a solid evidence base regarding what works and under what conditions.
To illustrate the power and promise of nudges for conservation, let’s consider an example. Most applications of behavioral nudges in the environmental arena have been in high-income countries and tend to focus on energy and water use (e.g., Ferraro and Price, 2013). In 2012, however, the United States Conservation Reserve Program (CRP) — which, at US$2 billion disbursed annually, is the largest conservation performance payment scheme in the world — attempted to test nudges among its funds’ recipients.
Farmers ordinarily bid for 10-year CRP contracts in which they promise to engage in on-farm environmental practices in return for an annual payment. In periodic sign-up periods, eligible farmers compete for scarce CRP funds by specifying a payment and the set of practices they will complete in exchange for the payment.
During the most recent sign-up period, a group of Department of Agriculture employees and university scientists developed three messages designed to increase CRP participation, acres enrolled and the environmental benefits per dollar spent on payments. The messages were developed based on theoretical and empirical research in other policy contexts and were motivated by a belief that more environmental and social benefits could be generated with small changes in the way in which the CRP program sign-up was communicated to farmers.
Farmers were randomly selected either to receive one of the messages or to be in a control group that did not receive anything different from the usual communication about the program. When nudges are tested in a randomized controlled design, estimating impacts is straightforward. Whether a farmer receives a nudge or not has nothing to do with their potential behavior in the CRP. Thus the behavior of the control group is a valid estimate of how the nudge group would have behaved had they not received a nudge. Taking the simple difference between message and control group outcomes gives us an unbiased estimator of the impacts of the nudge. (Of course, a statistical test is also performed to characterize the uncertainty that any observed difference could be due to chance.)
One message highlighted how many other farmers had already enrolled and the environmental practices in which the top CRP “stewards” in a farmer’s state were engaged. The group that received this message had both higher participation and more acres enrolled, on average, than the control group. Had this message been sent to all eligible farmers with expiring CRP contracts, the impact estimates imply the message would have induced an additional 187,300 acres enrolled in the CRP at a cost of $0.15 per additional acre (i.e., less than a penny added to the total payment per acre that each farmer ultimately received). The cost of testing the impacts of the three messages was only ~$27,000.
Despite the rapid growth of behavioral nudge applications in a wide range of social policy fields, such applications have largely been ignored by the conservation community. Environmental practitioners and policymakers focus on shoves rather than nudges. – Paul Ferraro
The experiment also showed that, although more acres were enrolled, there were no significant differences in the average level of environmental practices implemented on message farms and control farms. In the next sign-up period, another experiment could be run to try again to increase the environmental practices per dollar spent. Changes in defaults — which have proven to be some of the more effective nudges in other social policy fields — are one obvious option.¹
For instance, in payments for environmental services programs that allow rural landowners to pick from a menu of environmentally friendly practices (such as the menu used in the CRP), the contracts typically start with the default of no practices and the landowner must add practices that they are willing to do. An alternative approach would be to start with a contract that includes the most environmentally friendly set of practices feasible on the land and let the landowner remove practices that he or she does not plan to implement.
Admittedly, we still don’t have an answer to the larger question of how more acres or more practices per dollar spent affects environmental and social impacts of the CRP. Future studies can focus on estimating these impacts. However, the take-home lesson is that we could be incorporating tests of behavioral nudges in a wide range of our conservation programs at little cost — and with the potential for developing a set of best practices that can contribute to environmental and poverty alleviation goals.
Creating lasting change
But while nudges may change behavior cheaply, will these new behaviors persist over time? In the environmental context, many of the nudges tested to date are based on social norm-based messaging, which are the least likely to persist over time. However, recent studies in the contexts of energy and water conservation have demonstrated that the behavioral changes from norm-based messages persist as long as the messages continue and that, even after the messages stop, there are persistent effects on behavior (Ferraro et al., 2011).
One study conducted in a drought-prone area found that residential households exposed to a one-time message aimed at nudging them to use less water did in fact use less water than a control group that received no such message — by almost 5% in the first year after the message was sent, and by almost 2% in the third year after the send (Ferraro et al. 2011; unpublished data suggests impacts are still visible 5 years later).
Nudges are not going to solve the global problems of ecosystem conservation, climate change and poverty alleviation. They can, however, contribute cost-effectively to the solutions. – Paul Ferraro
Can such a nudge solve water scarcity problems in drought-prone areas? No, but it’s a contribution to the solution — and a cheap one at that. The water system in the study was able to reduce water consumption in the message households at a cost of $0.37 per thousand gallons reduced in the first three years after the messages were sent (Ferraro and Miranda, 2013). Furthermore, the experimental results elucidated something about the equity implications of the behavioral impact: the burden of water reduction was largely shouldered by high-income households rather than poorer ones.