Behavioural Change its Australias choice

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Behavioural Change its Australias choice Per
Capita Presentation
20 October 2009
Subho Banerjee Executive Director Strategy and
Delivery Division
Disclaimer All views in this presentation are
my own, and do not necessarily represent the
positions of the Department of PMC or the
Australian Government
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Structure of presentation
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• Behavioural change and the development of public
  policy
• The purpose of behavioural change policy
• The question of existing preferences, and
  respecting choice

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• The design of behavioural change policies
• Expanding the policy toolkit
• Seeking to achieve tipping points

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• Behaviour change in practice
• Previous applications Tobacco and water policy
• Potential future applications - discussion

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Behaviour change policy aims to act across
the full range of drivers of behaviour, using an
expanded set of policy tools
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Considers full range of drivers of behaviour,
and targets them for policy purposes
Behaviour change policy
Aims to use a more complete set of policy tools
to shape choice architecture to achieve policy
objectives
Source SDD analysis
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Choice architecture is ubiquitous from school
canteens to all areas of public policy
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Potential to affect decision makers
Options available
Canteen operators are choice architects
Presentation of food options set the context for
consumption decisions

• Use price alone on blackboard
• Add advertising for options
• Arrange food to sell healthy items the framing
  options alone can increase or decrease
  consumption of items by up to 251

Government policy will always (at least
implicitly) set the context in which economic,
social and environmental decisions are made

• Use price/regulation alone
• Complement with information measures
• Create choice architectures that further policy
  objectives

Government is a choice architect
There is no pure state where choices are not
subject to framing the real issue is whether
different framings can help to realise further
individual and societal aspirations
Source 1) Thaler R, H., Sunstein S, R. Nudge,
Caravan books 2008
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There is an important conceptual distinction
between realising existing preferences, or
seeking to change them
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Example
Government intention
I want to adopt a healthy diet...

• Individual preferences match Governments target
  behaviour
• Barriers prevent individuals from realising
  target behaviour
• Government removes barriers and enables
  individuals to realise target behaviour

• Potential Government policies
• Food labelling standards
• Educationhealthy food pyramid
• Support through the medical system (eg Medicare
  rebates)
• Healthy eating promotions

Realising existing preferences
... I am happier with my choice

• Individuals preferences do not match the
  Governments target behaviour
• Individual does not want to change behaviour
• Government aims to change an individuals
  preferences

• Potential Government policies
• Banning of tobacco advertising
• Government advertising
• - Smoking is an ugly habit
• - It does harm to others
• Banning in public spaces
• Quit-line
• Increase price of tobacco

I enjoy smoking...
Changing existing preferences
... but I dont think it is worth it any more
When is the government justified in changing
existing preferences?
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When seeking to change existing preferences, it
is important to be clear about the rationale and
the societal mandate
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Facilitating change
Externalities
Why is government seeking to change my
preferences?

• Government may seek to change individual
  behaviour when elected to achieve a policy
  outcome that requires community change
• Social standards do not always keep pace with
  scientific findings or resource needs (eg, water
  use or climate change), which may require
  government to facilitate change

• Government may seek to change underlying
  behaviour when private behaviour has public
  consequences (eg littering)
• Particularly relevant where individuals or groups
  exhibit pathological behaviour (eg, young men and
  speeding)

Equity
Reducing Government Costs

• Government may promote desirable behaviour where
  it is likely to lead to increased life
  opportunities for individuals in the future
• For example, No school, no pool programs seek
  to promote school attendance in certain remote
  Indigenous communities

• Government may promote desirable behaviour where
  it has a significant impact on overall fiscal or
  societal expenditure
• Obesity and smoking are expensive problems which
  are likely to increase the taxpayer burden
  significantly if social norms are not changed

• Smoking
• Alcohol consumption

• Energy use
• Water use

• Road use
• Petrol/LPG consumption

NOT EXHAUSTIVE
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Government needs to think about motivation,
ability and a trigger simultaneously to bring
about behavioural change
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• Triggers
• Households need triggers to set off a small
  change in behaviour and take them on a
  step-by-step journey to bigger changes. These can
  be
• Facilitators to make new behaviours simple and
  easy
• Signals that motivate people to act
• Reminders that tell people to act now

• Motivation
• People are motivated to change their behaviour by
  a range of complex drivers, including
• Social norms peoples desire for social
  acceptance and fear of rejection
• Sensation the way the current and potential new
  behaviour makes people feel
• Anticipation peoples hopes and fears for the
  future

Motivation
Trigger

• Ability
• The best way to increase ability is to make new
  behaviours simple and easy to do
• Inexpensive
• Quick
• Physically easy
• Simple to understand
• Socially desirable
• Routine

Ability
Source 1) Fogg Behaviour model, BJ Fogg,
Stanford University
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Governments need to expand their toolkit through
drawing on the lessons of behavioural economics
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Insights from behavioural economics broaden the
traditional approach
Traditional approach
Policy responses
Assumes that people make decisions primarily
driven by price-driven utility considerations
Rely on regulatory and financial levers,
primarily affecting price signals

Behavioural economics
Policy responses
Recognises that decision making is influenced by
factors other than price, including peers, social
attitudes and habits

• Influence broader contextual, social and
  environmental factors
• Support individuals to change behaviour

Source 1) Heads, You Die bad decisions,
choice architecture, and how to mitigate
predictable irrationality, Jade Fuller, Per capita
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Getting Australia to act behavioural economics
can also be used to target faster adoption
through the population
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The Adopters Bell Curve helps locate a target
audience to get to a tipping point for adoption
across the population1

• The diffusion of innovation theory states that
  for most members of society, the decision to
  adopt an innovation depends on the behaviour of
  other members of society (band-wagoning)
• New behaviours are initially taken up by
  innovators and early adopters who promote them
  through their peer to peer networks
• Behaviour change tools can encourage innovations
  to follow this bell curve and reach a tipping
  point
• If a tipping point is reached, the rate of
  adoption becomes self-sustaining

Number of adopters
Tipping Point Range
Time
Source 1 ) Rogers, E. (2003), Diffusion of
Innovations, 5th Ed, 2
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Behaviour change in practice tobacco policy
campaign shows that the dramatic change is
possible
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Leading to a dramatic decrease in the amount of
tobacco consumed and large avoided health costs
Traditional and non traditional tools used
Amount of tobacco products on which excise duty
was paid, Australia 1952 to 20001

• Traditional tools
• Comprehensive ban on all forms of advertising
• Tobacco excise
• Restriction of retail sales
• Smoking bans in public spaces

Kilograms of tobacco per person over 15 years
Broadcast of tobacco advertising phased
out Increase in state fees and federal excise duty
Commencement of quit campaigns
Introduction of workplace smoking bans

• Non-traditional tools
• Public awareness campaigns
• Personalised support for quitting (eg Quitline)
• Involvement of doctors and allied health workers

New health warnings
National tobacco campaign
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1952
1999
In the past 30 years, policies targeted at
reducing tobacco consumption saved an estimated
8.6b through avoided death and related
illness/disabilityFor every dollar spent on
tobacco programs in Australia, two dollars were
saved2
Source 1) Scollo, M VCTC (62) 2) National
Tobacco Strategy 2004-09
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Behaviour change in practice use of a wider mix
of tools in Qld water policy achieved a 57
reduction in per capita usage
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• Target 140
• Aimed at reducing water consumption in drought in
  South-Eastern Queensland
• Run by the Queensland Water Commission
• Developed in response to a severe drought and
  South-east Queensland's dwindling water supplies

Source Adopted from Queensland Water Commission
2009
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Addressing Australias next long-term policy
challenges will require further consideration of
choice architecture
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Policy tools available to address these challenges

• How can we get the most appropriate mix of
  traditional and non-traditional tools to address
  these challenges?
• What are the potential barriers to a broader
  reform agenda?

Discussion questions
Source 1) Treasury modelling 2) Australian
Bureau of Statistics National Health Survey
4364.0 3) Access economics 4) Australian
Organ Donor registry Channel 9 media centre