Behavioural economics unit Ideas42 have released a new white paper that shows what an important role behavioural economics can play in increasing savings rates among the poor.
Results from trials carried out in the Philippines showed that by introducing behavioural levers at important stages of opening and interacting with a savings account had dramatic effects. In fact clients exposed to the new design when opening a savings account made initial deposits that were 15% higher than clients using the standard process. The intervention, used in the trial increased bank balances by 37%.
How can we avoid making mistakes at work? The reason we do according to Atul Gawande author of The Checklist Manifesto: How to Get Things Right is because “the volume and complexity of what we know has exceeded our individual ability to deliver its benefits correctly, safely, or reliably. Knowledge has both saved us and burdened us”. In order to overcome the problem according to Shane Parrish in his blog for Farnam Street featured in The Week, we need a strategy, and something as simple as a checklist will often suffice.
Move over to the slow lane
The BBC’s well-known documentary show Horizon has devoted a show to “How You Really Make Decisions”. In a supporting article on its website, it touches on Nobel Prize recipient Professor Daniel Kahneman’s ideas about intuition and logic, as well as Predictably Irrational author Dan Ariely’s assertion that behavioural economics research has wide-reaching implications, including for financial systems.