>>David Halpern: It's great to be here.
I should explain the sort of background in terms of actually reset.
I actually worked for a previous administration.
I did six years for Tony Blair and I left government and I've written a book about various
things about if you were prime minister, things you might do, and some of them included things
like use behavioral science and actually be much more serious about well-being we're talking
about now.
I was rather surprised, actually, in 2010 then to be asked to come back into government
and try and do some of those things.
So what I'm going to very concisely try and do is show you what we do do, actually.
It's a very nuts-and-bolts use behavioral science.
But then I'm going to lead you back to, well, why would we worry about well-being, and to
what extent would it take us back to that area, and also leave you with a question,
which is: To what extent is it our business, anyway, in government or indeed anybody's?
Okay.
So let's see how we're doing.
So this is just by way of background.
This is kind of who we work for.
We have a -- work for the cabinet secretary and the prime minister and the deputy prime
minister.
This is what we do.
But we actually have a kind of skunk work operation, essentially, in government, and
as Dan says, we do a lot of experiments.
We've probably done more randomized control trials in the last couple of trials than all
of British government has ever done, which has been a really interesting period.
But let me just show you about what we sort of do.
Here's an example of a nudge, if you like, a behavioral insight, an old one, but it's
probably saved your life today.
It's saved your life probably on many occasions.
It made the economy work long before we had the Internet.
An amazing nudge.
It's this: Lines on the road.
Fantastic.
It's an absolutely genius invention, if you think about it.
And for most of the history, actually, of driving in the U.K., there wasn't a law at
all, actually, as to what side of the road.
It's just when you're learning to drive, you follow the code and someone says "It might
be a good idea, try this side rather than the other," generally speaking.
And originally there weren't lines on the road at all, of course.
And actually at a place called Manning Corner, in the early 1920s, these newfangled cars
kept hitting each other and someone had the great idea, "Well, you know, we could pass
a law, have bigger fines.
Why don't we just paint a line in the road?"
It actually worked really well.
A nice local experiment.
In some sense, that's the kind of example of an everyday nudge, and we do lots of those
sorts of things.
So let me just move on.
I thought I could just quickly throw you sort of three quick examples of the nuts and bolts,
and I'll go through the more strategic and get back to well-being.
So here's an example.
Remember, by way of background and reset terms, you got administration in 2010 which finds
it doesn't really have any money because of austerity and you've got an administration
that doesn't want to mandate, use legislation all the time.
So how could you nudge and have bigger impacts?
And one of the early questions, "Well, you might not be able to make everybody feel completely
happy about taxes -- it would be great if we could do that -- but could we just actually
make people more ready to pay them?"
So this is a block on unpaid tax, and we just put one line into the letter.
Just one line.
And we just tell people something which just happens to be true: "Nine out of 10 people
-- most people -- pay their tax on time."
Why don't we just do that?
Well, it turns out it has quite a big impact.
Here's our control group.
"Nine out of 10 people pay their tax on time."
Which actually, to be more specific, "Most people in your area pay their tax on time."
That's even better.
We flip it around and just say, "You are one of the few people who haven't paid your tax
on time."
That works actually really well.
And indeed, when you put those together, an even bigger impact.
So just one line, a little bit of extra information about something essentially telling you that
other people are more virtuous than you thought they were, has an enormous impact and the
marginal cost is almost nothing.
So here's another one.
Loft insulation.
So our department of environment would often come along, "Could you give us another billion
to subsidize loft insulation?"
It's kind of an interesting puzzle, this, because it looks like it's a no-brainer anyway
because you get your money back in the first year, so why wouldn't people insulate.
So we had a think about this and we concluded one of the reasons actually, it turns out,
you got a third of homes in the U.K. still under-insulated isn't to do with the money.
It's just because people's lofts are full of stuff which they should have thrown away
years ago.
They still got their kids' school books and all the rest of it.
So we thought, "Well, let's run these things."
Here's our control group.
So we pay money to one.
It is an offer to get insulation.
"We'll offer you an even bigger discount, if you can get your labor."
Or actually, the alternative, we just say "We'll offer you service to clear your loft
for you, put it into three paths -- chuck it away, et cetera, et cetera -- keep this
stuff, and people have to pay for it, actually."
So there we go.
That's the result.
Near a five-fold increase.
So we didn't need more money.
Money wasn't the issue.
Actually, we just had to get into the kind of core issue: Well, what was the problem?
And one last example.
Getting people into employment.
Actually, our main work is growth and what can we do, and this is an interesting intervention,
because we're not going to change people's skills in this particular intervention.
One is we just look at the paperwork.
You go into a job center -- many of you would never have done this -- actually you have
a whole load of bits of paper to sign.
Eight or nine different documents.
In fact, one of them, it turns out, when we looked at it, was they needed to keep a copy
of your signature.
You know, having asked you for eight other signatures.
So we changed that.
We get people instead of thinking about what do you do in the last couple of weeks, which
happens in most welfare states that show you have been looking for work, to forget all
that, think about what you are going to do in the next couple of weeks and think about
it in specific ways.
So if you want to effect behavior, you prompt people in very specific ways.
When exactly?
After they have taken the kids to school, I will do the following.
I will get on this Web site.
I am going to search for this kind of job and so on.
And the other thing we get them to do is to get people to think about what they do well,
not only what they do badly.
A lot of welfare ends up defining people by what they can't do rather than what they can
do.
We get them to think about it in a positive way.
Randomized control trial.
What we do is we take an area, we split the people into two samples.
This is before it goes along.
And then here comes our intervention.
It kicks in.
And there we go.
So randomized to one stream or another.
And as you can see what happens basically is we get 5 to 10 percentage point increase
of benefit at 13 weeks.
And if you like in other terms, it is a 10 to 20% increase the number of people who are
off benefits in 13 weeks.
So that's not deeply about well-being, but what I wanted to show you is just briefly
this is what we kind of do nuts and bolts.
It is not only small things that are affected by this choice architecture but actually big
decisions in life, too.
So what else do we do?
We use it systemically in other ways as well.
Try to get rid of regulation, red-tape challenge.
Can we find an alternative?
If you want to do that, you have to think of what would an alternative be.
So why do we have, for example, lots of inspection in many areas of public life?
People in white coats checking on care homes.
Why don't we just ask people themselves: Would you recommend it to other people?
Would you recommend this care home to someone else?
And, actually, that is incredibly transformative of the quality of service we know in other
domains.
It means the individual starts thinking about, actually, the person in front, you started
to treat them with more respect and dignity when you move to a net-recommender score.
I will not go into detail about giving feedback on government buys a lot of stuff.
Imagine we just told the world, someone bought this Web site.
It was really effective.
It was a small provider.
Actually, why don't we tell the rest of the world that's true.
Change its market.
Or one last one around using behavioral insights in relation to markets more fundamentally,
we live in a world, as we hard, where there is far more data but often actually consumers
themselves only have partial access to it.
So in an energy market, for example, six major producers.
And, yet, we have 500-odd tariffs.
What can we do to make that a little different?
Imagine on your electricity bill, you would have a QR code.
When you call up to switch your supplier, would you know the difference?
Would you not?
Do you use more electricity than other people or less?
Actually most people don't know the answer to that question.
They can all be in your QR code.
And then, of course, you can just put your smartphone against it.
Presto, here is the best tariff for you.
You can click.
It changes friction out of the market.
It changes markets fundamentally using these kind of behavioral insights.
What does that all got to do with well-being?
Let me take you back to the subject in a second.
One of the most fundamental influences on our behavior, of course, is other people.
You have heard glimpses of that already.
The curious thing about often how we design public services is we don't enable them to
do that.
Just to give a personal example.
I have two boys and my youngest son had a tracheostomy for the first four years of his
life.
He is fine now, whatever.
We said actually to the myriad of consultants who we worked with, we would be really happy
to look after someone's kid for an evening or whatever.
We would like to reciprocate.
People often want to do that.
We were never asked even when we made an active offer.
It is a very curious thing.
We often build services in the public sector that don't enable people to support and help
each other.
And it is a very powerful thing that people want to do as well as efficiency.
Can it be done differently?
This is a patient hotel in Sweden.
And the key thing you note when you open the door to one of these things is there is two
beds in the room.
Actually, you're encouraged.
You are able to stay with your partner or your child as opposed to being told the visiting
hours are the following.
What do you get in patient hotels?
Well, you get high patient satisfaction.
That's pretty good.
Nice to have.
You also get better clinical outcomes and actually it costs less as well.
Why don't we design services, enable people to essentially use what is called the hidden
wealth of nations to help each other?
We are using this stuff in changing nuts and bolts processes which fundamentally changing
how you might regulate or manage markets.
The bit that hangs over the top, which I want to get back to, was what are you trying to
do ultimately?
It turns out that it is not just small decisions about whether you're going to do your loft
insulation or whatever which are affected by these small details.
We use shortcuts essentially to make these decisions.
But it's true for big decisions in life as well.
We often -- you know, what career shall we be?
Shall I be a civil servant or shall I become a commercial lawyer?
I could find out how much I might earn in those professions.
It is much harder to find out, will I be happy?
And it seems like a lot of these things are essentially shrouded.
What's fantastic about Mike's work, for example, is he works through it systematically and
says: Actually how would you spend your money?
And he has got a whole load of things.
You can read his new book.
But when we look at it on a national level, we saw services -- some things -- won't go
into details.
We used control trials.
Let's just go into this last slide.
This is across the world.
I mean, many of you, I'm sure, have seen this graph before.
It is still remarkable.
It is GDP per capita and there's life satisfaction.
Now fortunately, unlike actually the U.S. or the, indeed, the U.K. data, when we look
at it if over time and it is flat, an interesting puzzle, when we look across countries, there
is a very strong relationship between essentially GDP cap, you know, wealth and life satisfaction.
Sort of good to know.
There is the U.K., by the way.
But what's interesting is to think about the spread, right, on any given point.
Why is it we can feel pretty good?
We are above the regression line, say, above Japan or Hong Kong despite similar levels
of essentially wealth.
But why is it Australia is above us?
Or the Danes.
Look at how preposterously happy the Danes are.
And, interestingly, they have been getting happier for the last 30 years in their data.
It is really interesting.
What is it that explains this?
Partly, of course, GDP per capita does have an impact.
You can see it there.
Same is true at the local level, by the way.
We have the data now in the U.K.
You can see it at the local level.
It is all kinds of other things that matter.
What a surprise.
Do you know your neighbors?
Do you think other people can be trusted?
Enormous variations across countries and levels of social trust.
So the Danes live in a really high trust country.
Sort of 70% would say, yes, most others can be trusted.
In the U.K., it would be 30 to 40%.
In some countries, it is less than 10% by quite a big margin.
How long is your commute?
All these other factors impact your well-being, quite profoundly.
So the first step is to at least deshroud it, to reveal it.
I mean I make a mistake.
I commute from Cambridge to London every day.
It's nuts.
I can see the data.
The longer your commute, essentially the economists say I should just as happy because I will
get bigger earnings and bigger house, but it is not.
The longer your commute, the less happy you are and actually the less happy your partner
is as well.
So we seem to make mistakes in these decisions that we make.
The last question I guess I leave you with, which is true for true for the very small
details of is it right to use behavioral insights in policy?
But more fundamentally when you get into well-being, who is it to decide actually?
To what extent is it -- what is the role of government?
And that's something which we all sort of need to explore, particularly since many of
the things that drive our well-being aren't under our individual control but actually
are -- rest as much about what other people around us are doing.
So there we go.
Thank you.
[ Applause ] >>Dan Ariely: Great.
So the question of paternalism, I think, is essential.
When we do our a little experiments, it is affecting our students.
When we do things with companies, companies have some right.
What are the limits of how much government should influence people?
And how do you actually communicate that in a way that is more palatable?
>>David Halpern: Well, I mean, for using behavioral insights in general, I think it is really
important that when we do randomized control trials, I always feel we are not only doing
that in order to see is it effective to do this small change?
But also we are actually testing public acceptability.
That's a really important part about what we do.
So say we are -- a number of countries, including the U.K, have changed their thoughts around
pensions.
It was absolutely key.
The only reason why the policy, I think, was able to hold the line was because there had
been a very big public consultations where essentially the dynamic is the public are
saying to us, We give you permission to make that change actually.
And this is very true for a lot of lifestyle issues and, of course, once you get into institutions
of well-being, then fundamentally so.
>>Dan Ariely: Were there any things that you felt would be a great idea but public acceptance
is very low so you're...
>>David Halpern: Yes.
[ Laughter ] >>Dan Ariely: Can we get an example?
>>David Halpern: Well, of course, there are the use of incentives where you use lotteries
in some areas, for example, where people might feel is that right for government to do or
is it not.
But when you come to well-being more fundamentally, to just kind of get us back to the core discussion,
so we know one of the things about income, right, is that income -- getting a new Ferrari
doesn't make you that much happier because you adapt to it and it also has negative externalities
so your neighbors then just making do with their BMW feel bad.
But there are other things that have positive externalities, so actually helping other people,
volunteering.
If you live in a society or a community where there is high levels of volunteering, even
if you don't volunteer, you can nonetheless see the increase in your well-being.
And so this is the interesting -- that's what normally what governments and communities
get involved in, where you get these strong externalities.
It is not just about an individual choice.
But still I think we need to up our game in terms of our capacity to get kind of collective
decision, like, is that what we want to do, choice we make together.
>>Dan Ariely: Very good.
Last question.
Are you ever concerned that in your role in the British government trying to increase
happiness and well-being that the criticism would be that it's because you have no GDP
growth?
[ Laughter ] >>David Halpern: Well, it is an obvious criticism.
Hopefully, we can do both those things and actually as you can see across countries -- actually,
you know, the start -- Eric's almost -- just get information actually.
So the U.K. has led, for example, on these very large scale surveys of life satisfaction
and do you think what you do is worthwhile.
It is not just for government users.
It is to make that data available for people.
If you are a 18-year-old and trying to do what to do in life or where to live, actually
that's what it will drive.
>>Dan Ariely: Very good.
Thank you very much.