Items tagged with behavioral economics:
News & Updates:
Based on a thesis presented in a PPI article entitled Addressing Personal-Income-Tax Manipulation with Tools from Psychology, Professor Alex Ree-Jones discusses how governments should utilize the behavioral tendencies of tax payers to minimize losses and maximize rewards in order to create the most generative tax revenue systems.
According to the research of Lee Ohanian and Jesús Fernández-Villaverde, California has undergone an increase in population. A few of the problems related to population increase are the cost and lack of housing. The median home value in California is 150% above the national average($541,800 to $218,000). Additionally, only 30% of California residents are able to afford the state’s median home value. To address California’s housing challenges, Ohanian and Fernández-Villaverde both argue to enact more zoning regulations that migrate people to lower cost of living areas. Also, both Ohanian and Fernández-Villaverde recommend expanding rent control.
Faculty Affiliate Katy Milkman referenced for her work on behavioral economics and its potential impact on policyIn a thought piece on the intersection between behavioral economics and policy making, faculty advisor Katherine Milkman was cited as one of the scholars who’s work is expanding the literature on the power of evidence-based policy.
Faculty Affiliate Professor Katherine Milkman’s new findings on ‘nudges’ were published in Psychological Science, offering a low-cost, high-reward strategy for intervention in government. Nudges encourage certain behaviors - like retirement saving, college enrollment, energy conservation and more - without limiting the options available to the individual.
She states, “The changes in behavior produced by nudges tend to be quite cost effective relative to those produced by traditional policy tools – so there is a big opportunity to use nudging more widely in government in conjunction with traditional policy tools.”
Faculty Affiliates Professor Mark V. Pauly and Professor Scott Harrington comment on the concept of “nudging” consumers towards behavior that makes them better off, especially when it comes to healthcare.
“It’s sort of a minimal intervention which in principle allows autonomy, but also takes advantage of inertia,” said Harrington. “The idea is that you might be able to nudge people into a decision that is better than the alternative of doing nothing, but it still allows them the freedom to do something else.”
“It makes sense when it is something that is more or less good for people, unequivocally,” Pauly says of the auto-enrollment option. “The main reason someone wouldn’t do it is if it enrolled them into an option that wasn’t good for them.”