Behavioural economics
generations, there are a plethora of cognitive biases that unconsciously affect our actions and lead to irrational behaviour. There are many different cognitive biases, but I aim to only discuss the ones that are directly affecting the current situation.
Present bias refers to people’s tendency to give stronger weight to payoffs that are in the near future when compared to something that is further away. It affects everyone and is involved in a very widespread of decisions from ‘whether to eat that slice of cake today’ to ‘whether to stop smoking cigarettes’. It’s involvement in Covid -19, however, is around the decision to work and people placing greater levels of importance on the definite source of income in the ‘now’ than the potential risk of getting the virus in the future. Status quo bias is where people seem to prefer the current state of affairs and any change from that is viewed as a loss. This bias is one that is more heavily affecting the younger demographic. Younger people have an aversion to breaking out from their regular lives and so they continue to meet up with their friends during the period, as they don’t want to deviate from the normal state of affairs.
Overconfidence bias is the propensity to have a false or misleading perception of our skills, intellect or talent; people think they are better or stronger than the virus and so they don’t have to worry about it.
Some or all of these biases affect (almost) everyone and lead to irrational decisions thatmean the spread of the virus has been a lot quicker and out of control than it might have been.
All of the biases mentioned above are things that affect our thinking and prevent us from acting rationally. From this fact it must follow that standard economic policies – heavily focused around rational thinking – do not seem to be very effective in influencing people’s behaviour and actions. Thus, many different policies have been created that attempt to include some of the behavioural economic concepts and ideas. As the vaccine for the virus is a relatively long way away from completion [ at the time of writing : editor], the role of effective virus control solely rests on non-pharmaceutical interventions – actions, apart from getting vaccinated and taking medicine, that people and communities can take to help slow the spread of illnesses. These non-pharmaceutical methods include social distancing, handwashing and facial coverings. This means that it has become very important to encourage those actions and make the necessary knowledge and equipment available. Some of the most impactful changes have been involving the dissemination of information – not through the expected channels. The WHO (World Health Organization) has been impressing upon all the governments of the world the critical role that can be played by effective communication, such as how to wash hands, and the importance of keymessengers. The latter aren’t necessarily Presidents, PrimeMinisters or evenmedics. In the Democratic Republic of Congo, for example, they placed the importance on the trusted local taxi drivers to spread the information to their customers. This method links to the BI (Behavioural Insights) team’s ‘EAST’ and ‘MINDSPACE’ which are both acronyms that are designed to help governments implement effective behavioural economic policies. MINDSPACE is the more comprehensive one and it stands for:
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