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How can behavioural science tackle poverty?

Assistant Professor Avni Shah is the lead academic organizer for an event that will look at how the behavioural sciences can inform poverty reduction strategies. (Photo by Ken Jones)

In September 2015 President Barack Obama issued an executive order to use the insights gained from the behavioural sciences in designing government programs. 

The result was the creation of the Social and Behavioural Sciences Team, a group of scientists and psychologists who focus on the effectiveness of government programs in the United States by looking at how easy they are to access, understand and use.  

In a similar vein Avni Shah hopes the lessons of behavioural science can inform poverty reduction programs. She’s the lead academic organizer of the Poverty Symposium @ Rotman, a one-day event during which financial experts from around the world look at how the behavioural sciences can help the most vulnerable in society.  

Shah, an assistant professor of marketing in U of T Scarborough’s Department of Management and a research fellow with Behavioural Economics in Action at Rotman (BEAR), spoke to writer Don Campbell about the issues around developing poverty reduction strategies and programs that work.    

What got you interested in poverty reduction and what led you to help organize this event?

One big focus for our group at BEAR has been on improving financial decision-making for vulnerable groups, particularly low-income and those living in extreme poverty. For me personally I think taking an interdisciplinary approach where behavioural research can be used to design better policies and improve wellbeing can be very effective. November is also financial literacy month, so we wanted to bring in financial experts in government, academia and the private sector to have a greater discussion about these issues.

The goal is to talk about developing informed policy but also hopefully collaborate going forward and solve some of these issues. A big problem with poverty alleviation strategies is that many of the psychological barriers are not well understood. For example, many vulnerable people avoid filing taxes because they fear the government will come after their money. As a result, they end up missing out on benefits or they don’t know that they will get most of their money back. We need to know what we’re missing, what are these barriers and once they’re better understood go about improving the system so that it really has an effect on well-being.

What can the behavioural sciences offer? 

You can conceive the best policy in the world but if people are not adopting it then it will not have its desired impact. Some vulnerable people miss out on benefits because they don’t trust the government. Others may not even get a birth certificate for the same reason. Quite often we have no idea who actually needs benefits or not because records aren’t accurate. There are many psychological barriers and policy alone is not enough to address them because we need to also understand the underlying behavioural issues at play. If we can better understand why people don’t want to file their taxes, we can then design programs that address those fears and offer sound advice so these programs can be more effective.

What are some examples of how the behavioural sciences have informed government policies?

Two examples that stand out for me are license plate renewal and organ donation. Many people weren’t renewing their license plates on time due to a variety of barriers including not having time to visit registration offices, not wanting to stand in line or simply forgetting to do it. The provincial government developed an online system for renewal but also had a big marketing push to remind people they could do it online. Well there was a massive spike in renewals being on time, which also helped people avoid paying late fines.

Canada and the United States have very low rates of organ donation, so BEAR was tasked with looking at ways those rates could be improved. They found that some countries around the world had very high rates of donation. The reason for the difference? It came down to how people are able to sign up. In Canada and the U.S. people have to opt in to donate when they get their driver’s license. On the other hand, countries with high rates of donation have to opt out of organ donation. So here’s a straight forward change in policy but one that can significantly improve organ donation without taking away people’s individual choice to be a donor.

What are some specific areas that you hope to address?  

We have experts coming from all over the place, all with a range of expertise, who can speak to a host of different issues surrounding poverty alleviation. We’re going to look at the benefits of a guaranteed income for people living in extreme poverty. These cash transfer programs can significantly improve wellbeing for many reasons. If people don’t have a job or stable income their predictable spending and other positive habits are affected. People are also more likely to skip health appointments if they don’t know where their next paycheque is coming from, not to mention spending on healthy food or housing costs. For other families there are situations where children are choosing to work rather than going to school.

There’s opportunity to improve tax reporting services as well as peer and mentoring programs, both of which have shown to improve wellbeing. There’s a lot of work being done with families living in extreme poverty that can’t afford sending their children to college. They know they can’t afford so they don’t think about the programs and grants that exist that can provide a lot of money for people if they enroll early. One big question is how do you get the information out there to let them know these programs exist? Again, it’s about getting people living in poverty the maximum benefits available to them. Too often these policies and programs exist but if people don’t know about them, or don’t sign up, it’s not doing any good. This is where the behavioural sciences can help both government and the private sector to improve the system.


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