Posts

An Introduction to Behavioural Economics for Health

There’s no doubt that there’s been fervent interest in behavioural economics in the last couple of years among social marketing and policy practitioners. Both the UK and NSW Governments have developed insights teams dedicated to finding new ways to ‘nudge’ citizens to be healthier, greener and more civic-minded.  So how can behavioural economics help with program design and campaign development?

Social marketing is about changing behaviour – behaviour that is driven by rational and irrational desires.  The rational part of our decision-making process can be influenced by increasing knowledge (e.g. presenting the facts about skin cancer), increasing efficacy (e.g. healthy cooking classes or QUIT hotlines) and through legislation and subsidies (e.g. seat-belt laws, tobacco tax).

However, extensive academic research has found that people are often “predictably irrational”.  When making decisions we take mental short cuts.  We’re influenced by the desires and distractions of the moment. Knowing how people will behave irrationally can provide guidance on how interventions can be structured to influence healthy behaviours.

Below are three common decision errors, which have major implications for healthy behaviours:

Present bias

Present bias is the tendency to focus on the immediate benefits or costs of a situation and undervalue future consequences.  An example is postponing a session at the gym to watch TV; or undervaluing the long-term harms of tanning to look good now.

Researchers are now looking at a range of tools to help manage present bias.  These include offering small incentives immediately after a ‘desirable’ behaviour has been done. One example is a pilot scheme in the UK where mothers from disadvantaged neighborhoods are given food vouchers worth around A$340 if they breastfeed for the first six weeks of their child’s life.

Because the use of incentives is very effective at motivating one-time behaviours (e.g. getting a vaccination or attending a screening), it is now being evaluated as an effective motivator for habit formation (e.g. exercising everyday).

People who commit to making a change are more likely to do so.

The use of ‘contracts’ and commitment devices to pledge to a certain behaviour or goal are also very effective. These devices leverage the desire to be (or to appear) consistent with what we have committed to doing.  Once we have made a choice (e.g. pledge to give up drinking for a month or to run a marathon), we will encounter personal and interpersonal pressure to respond in ways that justify our earlier decision.

This is especially powerful when the pledge or commitment is made in public, such as social media, as people are pressured to be consistent with their earlier commitments.

Status quo bias

Status quo bias is the tendency to choose a ‘path of least resistance’ in our decision-making.  An example of this is in western European countries that have an ‘opt in’ policy for organ donation, that is, the default is non-participation, donation rates tend to be close to just 10%. In contrast, in countries with an ‘opt out’ policy, in which citizens are automatically enrolled as organ donors unless they actively choose to opt out, organ donation rates are typically 98%–99%.

It’s important to consider the ways in which choices or options for programs are structured. The choices which social marketers want people to choose, whether it’s to recycle or take the right medication, needs to be the choice which requires the least amount of cognitive energy to choose.

Loss aversion

Loss aversion is the tendency to put much greater weight on losses than gains. Studies have shown that a loss has roughly twice the disutility of an equivalent dollar gain. Knowing this decision bias can help frame messages and structure the way incentive programs work.

Be Mindful that . . .

While behavioural economics has the potential to make programs and policies more effective, as with any concept or intervention, there are limitations.  The tools presented by behavioural economists are part of a possible solution, and should not substitute for public policies, infrastructural projects, or programs that increase knowledge and efficacy.

We also need to consider the social determinants which affect health and the decisions people make, while looking to policies that will deal with the underlying contributors to poor health, such as poverty, inequity and illiteracy.

As described by Loewenstein and Ubel, behavioural economics should “complement, not substitute for, more substantive economic interventions.  If traditional economics suggests that we should have a larger price difference between sugar-free and sugared drinks, behavioural economics could suggest whether consumers would respond better to a subsidy on unsweetened drinks or a tax on sugary drinks.”

 

Disclaimer: Charissa has written this post as an independent contributor.  This post reflects only Charissa’s views and not those of her employer or clients.

Interested in learning more?  Dr Kevin Volpp, the Founding Director of the Center for Health Incentives and Behavioural Economics at the University of Pennsylvania will be the keynote speaker at the Incentivising a Healthier Australia Forum in  Sydney on Thursday 6 March 2014.  Or, you could always  Contact Us

Encouraging Voluntary Behaviours

Last week I came across this fundraising box at Subway.

The sign promised that in exchange for helping I would feel good.  My inner philanthropist thought why not!  So I donated the coin contents of my purse and instantly received a good, warm fuzzy feeling.  Given that before making my way to the counter I had no intention of making a donation anytime soon, this campaign demonstrates the power of an appropriate value proposition to encourage voluntary behaviour.

Exchange in social marketing is often non-monetary and typically involves something else the target audience wants for performing the behaviour; where the benefit is most often personal and psychological in nature, such as a good feeling, social recognition or praise.  People always want to know what’s in it for them.  Therefore appealing to an individual’s self-interest, through a direct and timely exchange, is in every social marketer’s best interest – particularly when encouraging voluntary behaviour change.

So how can you appeal to an individual’s self-interest?  One way is by increasing the perceived value of what they receive in return.  Social marketing programs should attempt to manage social issues by ensuring the benefits (or perceived benefits) outweigh the costs associated with the advocated change – increasing the likelihood of voluntary adoption.

Whilst the concept that giving to others can make you feel good about yourself is not revolutionary, it is often overlooked or forgotten; replaced with classic campaigns involving images of in-need individuals designed to elicit sadness and guilt.  The ACT for Kids’ feel-good campaign is a perfect example of where a direct and timely benefit is offered in exchange for a voluntary behaviour, in this case a donation.

Another great example of an effective self-interest value proposition is from Kotler and Lee’s text ‘Social Marketing: Influencing Behaviours for Good’ (3rd edition).  An environmental social marketing campaign, aimed at reducing pollution affecting an estuary famous for harvesting blue crabs, reframed the issue as a culinary, not an environmental, problem.  The appeal to the target audiences’ stomachs (self-interest) rather than their environmental consciousness (societal benefit), provided a direct and timely exchange for changing pollutant garden care behaviours to more environmentally friendly behaviours and, consequently, was more effective than previous initiatives to change behaviour.

Whist the underlying objective is distinguishable between social and commercial sector marketing, an understanding of exchange principles is fundamental to both.  Recycling may decrease pollution, reducing energy consumption may help the environment and giving up your leisure time to volunteer may help those in need.  But ultimately, everyone’s focus is on themselves, so providing a good answer to the question of ‘What’s in it for me?’ is extremely important to behaviour change campaign success.

The Role of Marketing in Change Programs

This post comprises an excerpt from an article I wrote called, The Role of Marketing in Public Health Change Programs, first published in the Australian Review of Public Affairs in 2011.
 
It is the “goal of societal wellbeing that distinguishes social marketing from all other marketing applications and defines what is and what is not social marketing.
 
This excerpt presents my overview of marketing prior to my developing a framework for social marketing in public health.

Marketing is characterised by features such as a consumer orientation, segmentation and targeting, competitor analyses, extensive research with customers and potential customers to ensure that offerings are believable, relevant and motivating, and marketing plans for the ‘4Ps’ of the marketing mix: Product; Place (distribution); Promotion; and Price. Research and negotiations are also undertaken with intermediaries such as retailers, and with stakeholders such as unions and government, to ensure that making the product attractive, available and affordable will be facilitated by distributors and not hampered by structural and regulatory restrictions.

In all these areas, the notion of an exchange process between the ‘buyer’ (target) and the ‘seller’ (marketer) forms a platform of operation. A necessary (but not sufficient) condition for a successful exchange is that marketers offer people something they value in exchange for them purchasing, stocking or recommending the product or adopting the desired behaviour, whether they be end consumers, intermediaries or legislators. ‘What’s in it for me?’ is a key driver in determining appropriate incentives for the various target groups in campaigns.

Social marketing is just one ‘branch’ of marketing, where the branches reflect the area of application, for example sports marketing, business to business or industrial marketing, not-for-profit marketing, religious marketing, political marketing, and so on. However, the key point of difference to all other branches of marketing, is that the social marketer’s goal relates to the wellbeing of the community, whereas for all others, the marketer’s goal relates to the wellbeing of the marketer (that is, sales and profits; members and donations; political representation; etcetera). If the wellbeing of the community is not the goal, then it isn’t social marketing.

Marketing draws on a number of disciplines for developing, planning and implementing marketing activities, but primarily psychology (for example, consumer decision making; attitudes, values); communication (especially for persuasion); economics (for example, utilities, price elasticity); and sociology (for example, behaviour of groups and organisations; diffusion).

Social marketing extends marketing’s borrowings from psychology (for example, mental health and happiness), sociology (for example, war and conflict, social movements) and economics (for example, globalisation effects), and further draws on disciplines and concepts that are related to community wellbeing, such as public health and health promotion, criminology, social policy and social welfare, and environmental sustainability.

However, regardless of these elaborations, and regardless of whether we are targeting individual consumers or those in power to make regulatory changes, the primary paradigm is that of marketing.

Just like any marketing campaign, a social marketing campaign works when it’s based on good research, good planning, relevant attitudinal and behavioural models of change, when all elements of the marketing mix are integrated, and when the sociocultural, legislative and structural environments facilitate (or at least don’t inhibit) target audience members from responding to the campaign. A well-planned social marketing campaign stimulates people’s motivations to respond, removes barriers to responding, provides them with the opportunity to respond, and, where relevant, the skills and means to respond.

Where social marketing campaigns have failed, it is not because the marketing paradigm has been inappropriate, but rather, the application has been inadequate or incomplete. Some critics of social marketing campaigns have claimed that marketing’s focus on the individual largely ignores the social, economic and environmental factors that influence individual health behaviours. While some social marketing campaigns deserve this criticism, this is not an inherent characteristic of marketing.  One of the fundamental aspects of marketing—and hence social marketing—is an awareness of the total environment in which the organisation operates and how this environment influences or can itself be influenced to enhance the marketing activities of the company or health agency (Andreasen 2006; Buchanan, Reddy & Hossain 1994; Hastings & Haywood 1994).

Social marketing campaigns have been developed and implemented across a broad variety of areas, beginning largely in developing countries and dealing with issues such as rat control and other hygiene/sanitation areas, vaccination, family planning, agricultural methods and attitudes towards women (Manoff 1985). Applications in developed countries include a variety of areas although the majority and most visible have been and continue to be in lifestyle factors related to health and injury prevention (that is, tobacco, alcohol, drugs, nutrition and road safety), with lesser applications in other areas impacting on health and wellbeing such as ‘problem’ gambling, racism, child abuse and intimate partner violence, and growing interest in applications to energy conservation, recycling and climate control issues (Donovan & Henley 2010).

The paper then develops a social marketing framework based on the principles of marketing, the public health approach and the Ottawa Charter for health promotion.

References:

  • Andreasen, A.R. 2006, Social Marketing in the 21st Century, Sage, California.
  • Buchanan, D.R., Reddy, S. & Hossain, Z. 1994, ‘Social marketing: A critical appraisal’, Health Promotion International, vol. 9, no. 1, pp. 49–57.
  • Donovan, R.J. & Henley, N. 2010, Social Marketing: An International Perspective, Cambridge University Press, Cambridge.
  • Gordon, R., McDermott, L., Stead, M. & Angus, K. 2006, ‘The effectiveness of social marketing interventions for health improvement: What’s the evidence?’ Public Health, vol. 120, no. 12, pp. 1133–1139.
  • Hastings G. & Haywood, A. 1994, ‘Social marketing: A critical response’, Health Promotion International , vol. 9, no. 1, pp. 59–63.
  • Manoff, R.K. 1985, Social Marketing, Praeger, New York.