Published on November 10, 2014
The field of behavioral economics is revolutionizing the policy and business worlds. But it has arguably had the largest impact on how we view and save money. Find out how several leading organizations are leveraging the best behavioral economics research to improve their asset building programs.
Matt Kinshella, Neighborhood Partnerships
Molly McGlone, Reach CDC
Cassie Russell, Bradley Angle
1. RE:Align Behavioral Economics And Assets #ReConf2014 | NeighborhoodPartnerships.org
2. 1) Our environment has a large, yet unrecognized effect on our behavior 2) Our intuitions about what drives our behavior are flawed 3) Emotions play a large role in our decision making - Dan Ariely
3. A healthy community begins at home. REACH provides quality, affordable housing and opportunities for individuals, families and communities to thrive.
4. Financial education classes Individual financial coaching Matched-savings accounts
5. nudge verb ˈnəj : to touch or push gently : to push gently with your elbow in order to get someone’s attention : to encourage someone to do something Merriam-webster.com
6. Boost self-control or activate behavior Self-imposed or externally-imposed Mindful or mindless Encourage or discourage Nudging options
7. Encourage mindfulness
8. Create environmental cues
9. Activate helpful mental accounting Mvelopes.com, Smartypig.com
10. Boost self-control
11. Map program process “I want to buy a house” Finds out about program Enrolls in financial ed Fills out IDA application Coaching, credit-building, planning Completes financial ed Opens IDA account Saves money, earns match Buys a home
12. Identify bottlenecks “I want to buy a house” Finds out about program Signs up for info session Fills out IDA application Financial ed, coaching, planning Attends info session, enrolls in financial ed Opens IDA account Saves money, earns match Buys a home
13. Simplify and/or nudge “I want to buy a house” Finds out about program Signs up for info session Fills out IDA application Financial ed, coaching, planning Attends info session, enrolls in financial ed Opens IDA account Saves money, earns match Buys a home
14. Encourage through social proof
15. More social proof…
16. What’s next? From opt-in … … to active choice?
17. • Founded in 1975 as the first domestic violence shelter in the West • Bradley Angle serves survivors of all genders, offering emergency shelter and community based services • The Economic Empowerment Program started in 2009 to respond to demand for services that addressed safety and finances simultaneously
18. Choice Overload • When faced with so many options, we often chose wrong • Chocolate or vanilla versus • Chocolate, vanilla, strawberry, mint chip, peanut butter, cheesecake, blueberry, • Practice example: Days for making deposits • Matched savings account offerings
19. Limited Attention • Limited attention can interact with choice overload. Attention is finite and we all love to “multitask.” • With limited attention a cost-benefits analysis becomes too hard and we “just pick one.” • Practice example: Car shopping
20. Procrastination • No explanation need! • Practice example: Making activities “one-sitting” • Setting artificial due dates
21. Loss Aversion • The joy of winning $20 is less than the pain of losing $20. Loss hurt us more than we feel the joys of wins. • Practice example: Missed deposit letters
22. Let’s Practice! • Get into groups and discuss one way you can address a behavior change tenant at work or at home.
23. Want to learn more? https://bitly.com/bundles/o_4 nk16lr8rj/1 #ReConf2014 | NeighborhoodPartnerships.org