Behavioural insights in the age of austerity: how research on the psychology of poverty can help us to stay focused on society

Public policy attention toward behavioural insights risks focusing on individual decision- making at the cost of considering the root causes of broader societal problems. But evidence from emerging research that spans the individual and society suggests that many behaviours associated with low socio economic status may be rational and adaptive outcomes of living in poverty. By Jennifer Sheehy-Skeffington

There was an air of self- assurance at the Park Plaza Hotel back in September, as the Behavioural Exchange conference, though only in its second year, welcomed more than 900 delegates from across the world. They were lured by the promise of learning how insights regarding the pitfalls of the brain—its “predictable irrationalities”, as Dan Ariely describes them — can enable us to improve the quality of decisions made by everyday citizens.

The argument goes that policy-makers and civil servants who want to improve how society runs should design regulations and communications to account for the ways in which heuristics, biases, self- regulatory failures, and social influences might prevent us from making good personal and economic decisions that we would have made otherwise. For example, our tendency to over-value the present means that we don’t save as much for the future as we should. However, if automatic enrolment is used in the design of pension schemes, citizens will rarely opt-out, thus saving more and benefiting both their future selves and society. Since the publication of Nudge in 2008, policy- makers have become aware of the potential for fruitful application in their work of behavioural economics—the study of the ways in which human decision-making departs from perfect utility-maximisation. But only recently, with the trumpeted successes of the UK Behavioural Insights Team and subsequent rekindling of interest in social and behavioural sciences in the US Government, has the science of behavioural insights been seen as an essential component of the toolkit of the savvy policy-maker.

“By definition, marginalised groups are the least able to fight back against the assumption, often enabled by a focus on individual decisions and behaviours, that they are to blame for their socioeconomic condition.”

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Jennifer Sheehy-Skeffington

Jennifer Sheehy-Skeffington is Assistant Professor of Social Psychology at the London School of Economics and Political Science. She is a social psychologist interested in the mechanisms underlying our human sensitivity …

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