Making ‘good’ decisions easier

Behavioural economics to improve environmental decision making

Four CEEDites at a behavioural-economics winter school. Pictured (from the left) are Rachel Friedman, Liz Law, Kerrie Wilson and Angela Guerrero-Gonzalez.

Four CEEDites at a behavioural-economics winter school. Pictured (from the left) are Rachel Friedman, Liz Law, Kerrie Wilson and Angela Guerrero-Gonzalez.

Behavioural economics melds ideas from psychology and economics to ask how our cognitive biases and limitations change our behaviour from that of so-called rational economic actors. It examines when and why Homo sapiens fail to match the expectations for those of Homo economicus, and helps explain why humans generally might not make the best decisions. For example, we often favour the present and discount the future; we have a greater aversion to loss than a desire to gain; framing and social norms influence what is perceived as good or right; and there are limits to our cognitive capacities.

As you can imagine, the field holds a lot of promise for environmental decision-making, which is why four CEED researchers (Rachel, Angela, Liz and Kerrie) recently attended a winter school in behavioural economics up in the beautiful setting of Queensland’s Lamington National Park.

We joined other academics and practitioners from a range of disciplines including economics, psychology, business, and education to better understand how behavioural economics can help us identify these biases and limitations that may impact our decision making.

One application of behavioural economics – the ‘nudge‘ – incorporates the understanding of behavioural drivers into the design of procedures, options, physical environment, and information. Positive attitudes don’t always translate into desirable behaviour, and some of the biases and limitations discussed earlier may cause this to occur (eg, see Decision Point #93). Behavioural economics is about identifying and dealing with these biases and nudging is about making good choices ‘easier’ for people. The winter school also taught us the importance of evaluating interventions aimed at shifting behaviours. Michael Hiscox, head of the Australian Government’s Behavioural Economics Team (BETA), detailed the use of randomised control trials to assess what works. Unfortunately, conservation interventions (like designating a new protected area) often don’t lend themselves easily to such controls. Usually, randomising ‘treatment’ is not possible – we can’t protect an area based on the roll of a die, for example – and we often don’t have good baseline data to compare the impacts with. Yet some activities could be designed from the outset in a way that better enables us to assess their efficacy. This is something conservation scientists should keep in mind when developing new studies.

All in all, it was a fabulous winter school. We were exposed to the potential of behavioural economics, made new connections across disciplinary divides, and sparked some fresh ideas for pushing our environmental decision science.

At the start of 2017, we’ll be pursuing some of these ideas by hosting a week-long workshop to apply behavioural economics principles and methods to the challenge of reducing land clearing in Australia.

More info: Rachel Friedman

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