Nudge nudge win win for Aussie state govts

A little nudge could save Sydney's  St Vincent's Hospital more than A$66,000 (S$69,114) a year.
A little nudge could save Sydney's St Vincent's Hospital more than A$66,000 (S$69,114) a year.PHOTO: EPA

Agencies using behavioural economics get people to pay taxes and fines, eat healthily

A hospital in Sydney has found a creative way to ensure patients turn up at appointments: Send a gentle text message reminding them that failing to attend will leave the hospital A$125 (S$131) out of pocket.

This so-called "nudge" message, trialled earlier this year, led to 19 per cent less non-attendances than a standard text stating the date and time of an appointment.

A little nudge could save Sydney's  St Vincent's Hospital more than A$66,000 a year.

The trial message follows moves by several Australian governments to set up "nudge units" - agencies which use behavioural economics to encourage people to make decisions that are better for both themselves and the broader public.

The state government of New South Wales (NSW) was one of the first in the world to copy former British prime minister David Cameron's famous nudge unit, which started in 2010. The state of Victoria and the federal government have followed suit, setting up similar units.

A new report on the NSW scheme, which began in 2012, said it was achieving strong results, particularly in areas such as encouraging people to pay taxes and fines and to improve their own health.

The report, released by the government's Behavioural Insights Unit on Monday, listed several recent successes.

The schemes included sending text messages to public housing tenants who had fallen behind on their rent - a move which led to a 9 per cent increase in people paying off their debt. The messages reminded tenants of their commitment to pay rent. Previously, tenants were contacted via writing or by home visits.

Another scheme changed the wording of a letter reminding women to attend cervical cancer screenings - a move which could lead to an extra 7,500 women across the state attending such checks each year.

The scheme tried various letters. It found the most successful was one which noted that the screenings take only 15 minutes and can reduce cancer risk by 96 per cent, along with a tear-off slip for the woman to note details of her appointment.

"We are now pretty adept at understanding how simple behavioural techniques such as changing a letter or sending a text message can nudge somebody to pay a fine or attend an appointment," the report said.

The NSW unit said it was considering several new schemes, including efforts to reduce traffic and congestion in Sydney by encouraging commuters to travel to and from the central business district outside peak hours.

It will also seek to promote diversity in the public service by attempting to combat "unconscious bias" in the ways that bosses select, promote and retain staff.

In Victoria, the government is trying various techniques to get people to eat healthier food. These include hiding sugary drinks from view at points of sale at a hospital - a move which led 12 per cent of buyers to go for a healthier alternative. It is also trialling free water fountains at a football stadium and pushing pubs to encourage people to drink water, for instance, by including "water" as an item on the menu.

The Australian Tax Office has found that the wording in letters, using a variety of colours of fonts and even addressing taxpayers by their first name can help to encourage people to pay their taxes on time.

But the use of these "nudges" by governments has prompted a mixed response.

Supporters say the technique is cost-effective, easy and entirely evidence-based.

However, critics say it is sinister and steers people to make decisions unconsciously rather than openly providing information.

Defending Victoria's campaign against unhealthy eating, Dr David Halpern, a psychologist and the head of Britain's Behavioural Insights Team, said using suggestive techniques does not deprive people of free choice but helps combat unhealthy habits.

He explained the power of the "nudge" earlier this year after working with the Victorian government's health promotion agency.

"We are evolving into a world where it's easier to make the unhealthy choice," he told The Age newspaper.

"The fundamental objective is to make sure that at least in most of these cases there is an easy and attractive alternative. If you want to change something, don't say 'stop', but offer a better alternative."

But the NSW nudge unit admitted that not all its ideas have succeeded. It said an attempt to encourage people who owe land taxes on investment properties to pay on time via letter, e-mail and text messages had no noticeable impact.

The unit suggested better understanding this group of taxpayers before trying future trials.

"As the land tax trial shows, there is always more to learn," the report noted.

A version of this article appeared in the print edition of The Straits Times on December 22, 2016, with the headline 'Nudge nudge win win for Aussie state govts'. Print Edition | Subscribe