 Good morning, everyone. I'm Alan Gingel from the Crawford School at the ANU and the H.C. Coombs Policy Forum. It's a great pleasure to welcome so many people here today. I want to begin by acknowledging that we're meeting on the traditional lands of the first Australians, custodians of humankind's oldest continuous civilisation and by paying our respects to the elders present and past of the Ngunnawal people. The H.C. Coombs Policy Forum, which has convened this conference, is part of an ongoing, indeed foundational role of the ANU in informing and deepening the public policy debate in Australia. One of our jobs is that of a matchmaker, really, bringing together the best thinking going on in the research community with the needs of policy makers and business. To do that, we have an absolutely stellar group of people here today and I'm looking forward very much to all the sessions which lie ahead. My job at this stage is simply to introduce the Vice-Chancellor of the ANU, Professor Ian Young, and invite him to get things going. Ian. Well, thanks very much, Alan. Can I say on behalf of ANU, we're enormously proud to be convening this conference featuring such an incredible array of really influential scholars and practitioners in this field of public policy, and in particular, the gentleman on the stage here with me, Professor Cass Sunstein from Harvard University, we're delighted that he was able to be here with us for the meeting. ANU sees public policy as one of the real cornerstones of what we do as a university. Obviously, research and education are central to our mission, but we really believe that as the Commonwealth University, as the university located here in the national capital, public policy is something central to what we do, and our ability to be able to work with government and the public service to enhance public policy is something which is very important for many of the elements of the university. And the ANU Crawford School is central to that mission. It is the focal point for much of our public policy research, education, and indeed public debate, and I'm delighted that not only the Crawford School but the university continues to have very strong links with government at all levels. As Alan said, this conference which is organised by the HC Coombs Public Policy Forum explores emerging ideas and good practice in dealing with complex public policy issues, and I think it's not unreasonable to say that the public policy landscape and the environment we deal with today is possibly more complex and more uncertain than it's been for a very, very long period of time. And so this conference explores ways in which recent research on in particular behavioural insights can lead to more effective and innovative public policy making. So the real reason that I'm here however today is that I'm delighted that Senator the Honourable Scott Ryan, the Assistant Cabinet Secretary in the Commonwealth Government, is able to address the conference today. The Senator was elected to the Senate in 2007 and then re-elected in 2013, and of course in the Turnbull Government he was appointed in 2015 to the position of Assistant Cabinet Secretary. Ladies and gentlemen, please join me in welcoming the Senator to the lectern. Well thank you Ian for the kind introduction and thank you for the welcome. Obviously I bring the apologies of the Cabinet Secretary. My boss, Arthur Sinodinas, has been called away on Cabinet business this morning and I thank you for the kind and optimistic welcome given that I know the agenda said you were here expecting to hear from Arthur. I've always thought that people who applaud before a speech are by their nature optimists and it's important at the start of a conference. You have no idea how long I'm going to speak for nor what I'm going to say so I enjoy coming into such an optimistic crowd. To Alan, to Ian, thank you for the opportunity to speak. I had the opportunity to join the Crawford Schools Leadership Forum Conference last year which was a fascinating way to get group politicians but also decision makers. I imagine some people in this room as well as media personalities and commentators there. It was a very I think important initiative to actually get a bit of cross fertilisation to oversee our overseas guests and particularly Professor Kassunstein who I've just had the opportunity to meet. Welcome as well. The theme for this conference, Designing Effective and Innovative Public Policy in a Complex Environment, summarises one of the key challenges governments face today. That these challenges are faced globally rather than simply here in Australia is demonstrated by the distinguished international speakers on the agenda for this conference. On public policy as much as in the world of politics and business there is great potential for collaborative innovation with our friends overseas and on behalf of the government I'd actually like to formally welcome all the international speakers here today. I note that at today's conference you will hear and I'm sorry I can't be here to join you from leading experts in behavioural insights in particular from Professor Sunstein. The behavioural sciences are relative newcomers to public policy but it's fair to say they have had a significant impact on public policy development in the last decade or so. Insights from the behavioural sciences have been successfully applied in public policy development internationally and here in Australia and it is an area we are keen to further explore. For example, the Australian Taxation Office has been successful in using behavioural insights to improve taxpayers' experience and compliance. Tailored text messages sent to their phones have helped taxpayers avoid going into debt and plain English debt letters using social norms have led to more people responding and paying on time. And the New South Wales Government has successfully utilised behavioural insights to get injured workers back to work more quickly and safely. So I'm pleased to announce that the Commonwealth is going to establish a behavioural economics team of the Australian Government or BETA as it will become known. BETA will be established as a joint initiative of seven agencies to be housed within the Department of Prime Minister and Cabinet and I'm delighted that Professor Michael Hiscox of Harvard has agreed to return home to Australia initially to head up the team. If I might add a personal insight, as I've found this area of research particularly fascinating, behavioural sciences, particularly as they are applied to economics, can provide fascinating insights into how current policy settings drive or deliver particular responses or results. However, while these tools help us understand the world as it is, they do not on their own automatically provide the political or public justification for using these tools to change policy or to seek to alter human behaviour. The challenge of generating public and stakeholder consent for policy change remains, it can never be assumed. Indeed, in some cases generating this consent may even be more critical as proposals arise to use these tools to alter or drive very personal or individual lifestyle choices or preferences, for there is occasionally some resistance to state involvement in such choices. If I can now borrow for your conference theme in a complex environment the decision-making model of traditional cabinet government has proven itself over time to be an adaptable and reliable way of generating sound policy outcomes. The Prime Minister has made it clear that a traditional cabinet government will be the primary decision-making body of a government committed to delivering innovative policy to ensure Australia remains a high wage, generous social safety net, first world economy. Regardless of the problem you are seeking to solve, proper policy processes will nearly always deliver sound policy outcomes and the key characteristics of proper processes are consultation, communication and research and then planning for effective implementation. If we look to international experience for example the Cameron government established the Major Projects Authority to make sure projects are delivered efficiently and effectively. Now there's no single road to this destination but translating good policy to a good experience on the ground, delivering a project or program on time and on budget and actually achieving policy objectives rather than merely surrogate measures of success will remain a focus for the government and for the public service. Good governments have clear philosophies and objectives to which they must remain true and all governments have some stakeholders more sympathetic than others. It is important that the cabinet receive regular feedback from the backbench of the parliamentary party those most committed to the philosophies and objectives of the government to ensure that it is well informed on community expectations and issues. And major reforms require appropriate consultation with stakeholders, those sympathetic to the government's objectives and those not so sympathetic the key being to consult widely rather than to elicit applause. The National Reform Summit of Business and Community Leaders was an example of minds meeting from across the spectrum of interests to consider and discuss the key reforms that will create jobs, drive innovation and stimulate growth. These discussions occurred in depth and at length among the participants before the government's economic team led by the Prime Minister met with the members to discuss the reform agenda. It is an agenda that touches on many strands of business and community life so it makes sense to review the issues of representatives from across the community and to try to find common ground. Of course good advice supported by research is essential to successful reform and the government has a tremendous resource in the Australian public service. In the modern world all advice is contestable and public servants are a bit like the ringmaster in the chaos of it all. There have been a few people of late harking back to an imagined golden age of the APS stating by implication or sometimes directly that the contemporary public service is not fit to advise on or deliver reform. My own view and I know this is the view of Senator Synodinus is that today's APS is indeed fit for purpose for a government bent on reform and beyond the anecdotal the evidence for that lies in the big reforms it has and is delivering. Examples include the design development conceptualization of the NDIS, a world class initiative of consumer centred care for people with disability and on the delivery side in relation to the government's Indigenous procurement policy there has been a 600 increase in Commonwealth procurement from Indigenous firms in the first four months of this financial year compared to the previous year. The APS is the primary source of nuanced policy advice and its expertise augmented by good corporate memory is essential to good public policy making. Of course the most perfectly formed policy in the world if poorly implemented will fail to meet its objectives. More than that poorly implemented policy can levy considerable costs on the community even causing death as we saw in the case of the home insulation program. Planning for effective implementation, listening to stakeholders and the community and adapting to what you hear limits the risk that policy will go off the rails. In the course of shaping and delivering public policy agencies naturally generate a huge amount of data not all of which they or we use effectively or comprehensively. We see it as an untapped resource and the government is committed to maximizing the use and reuse of public sector data across the whole economy and I know this conference is devoting considerable time to the question of developing innovative public policy and data use. Innovation extends beyond new policy ideas it also extends to devising innovative ways to deliver existing policy and to improving administration. It is part of the promise of the digital era and the government has established an executive agency called the digital transformation office to ensure Australians reap that promise by improving the quality of their engagement with government. When people can find the information and services they need online they have a better experience. Conversely when they can't find the information online easy they waste time and become frustrated. Getting information out of your government and easily is a basic service in a democracy but it is also an economic issue. Of the estimated 811 million transactions with government agencies every year around 40 percent are still completed using non-digital channels. According to a report from Deloitte Access Economics if over the next 10 years this was reduced to 20 percent the change would deliver around 17.9 billion dollars in savings to government and a further 8.7 billion dollars excuse me in savings for Australians through time convenience and out-of-pocket savings. Regulatory reforms as one of the themes of this conference is also one of the government's priorities. Too often governments resort to regulation as our first response. We're changing that thinking so that regulation is not seen as a costless way to address policy issues but even where we have good regulation the ways it is administered and applied by regulators can have a major effect on productivity. That is why we've also set out clear expectations for the performance of Commonwealth regulators. They need to minimize their impact on those they regulate while still delivering the vital roles for which they have been created and they will report publicly on their performance every year. But our goal is not only to reduce the cost of complying with regulation we have strengthened our regulatory reform agenda to make sure that when it regulation is necessary it is designed to support flexibility in our economy and encourage innovation to the greatest extent possible. Our government will be targeting productivity enhancing regulatory reform priorities. At the same time we will continue to reduce red tape. This helps to keep reducing costs for businesses, community organisations and individuals. This is essential reform if the government is to achieve both product the productivity growth which is necessary to support rising living standards. The Prime Minister likes to say there has never been a better time to be in Australia. I agree as with most of my colleagues and add that there has never been a better time to be engaged in public policy in Australia. The government has an ambitious policy agenda including the tax white paper, the federation reform process, the upcoming innovation statement and the government response to the Harper competition review. We face significant challenges but we have a vast potential in this country that is more than equal to meeting these challenges. Many of the policy settings we have are right but government must be as nimble and responsive to change as the rest of society and the economy. This government is absolutely committed to orderly and effective processes, to reaching within government to get the best advice from the public service and reaching beyond in consulting with the community. That includes the academic community and while I can't stay somewhat disappointed to hear some of the presentations later today, I'll be most interested in hearing the insights developed during this conference. I wish you all robust and fruitful discussions and I'm pleased to formally declare the conference open. Well, thank you very much. I'll now invite the head of the Crawford School, my boss, Bob Brunig, to introduce Cass Sunstein. Good morning, everyone. Welcome. Thanks, Alan. As Alan said, I'm the director of the Crawford School of Public Policy. As the Vice Chancellor said, policy and public policy is a key focus for every part of the Australian National University. It's something we take a lot of pride in. Within the Crawford School, we take a particular pride in our public policy outreach. We're working with pretty much every government agency that's represented here in the room. I have colleagues working with the AFP. I have colleagues working with Productivity Commission with innovation, with industry, with immigration. So as you're thinking about the development of public policy, the implementation of it, the evaluation of it, by all means, use your contacts in the ANU to help you think about that. If you don't know where to start, give us a call at the Crawford School and we'll try to help you out. I can put you in the right direction. So we're really honored to have Cass Sunstein here as the author of Nudge. As I read Cass's biography, which I won't go through in great detail, you can Google that sort of stuff for yourself, but he is the Robert Walmsley Professor at Harvard and he's in charge of the behavioral economics and public policy group at the Harvard Law School. He also spent four years in the Obama administration and I just want to, I just had two quick reflections when I read your bio. One is that, although one of my reflections has sort of been dampened by the announcement that was just made by the senator, one of my reflections was going to be how frequent it is in the U.S. that academics are brought into government and asked to help out in the development of policy and that doesn't seem to happen much in Australia. And I'm, be interested to hear from people during tea breaks and stuff why you think that is and whether you think it would be a good thing if we could change that. So I welcome the announcement about the beta team and the use of an academic and making government policy. I think it's a great thing. And Australia, it's not that we don't have the expertise, right? We've got four or five universities ranked in the top 100 in the world. We've got people in competencies across all the range of things the government does, so I would definitely encourage you to make use of academia. And then my second reflection was just that I'm really happy about the rise of behavioral economics because it gives me a lot of faith in economics as a science. What science does is it looks at empirics and it makes theory and then real science takes that theory and confronts the world. And when it finds out that there's a mismatch between theory and evidence, it doesn't close itself behind doors and say well we're just going to ignore that. It says well let's think about making new theory and better theory that actually matches with the evidence. And I think that's what behavioral economics is all about so without further ado please join me in welcoming Cass Sunstein, who we're very fortunate to have visiting. We will go about 45 minutes and then have questions for 30, 25, 30 minutes afterwards. Is that a good format? That's great. Great, thanks. Okay, it's an honor and a thrill to be here. I'm amazed by what you're all doing here on innovation and on behavioral science. I've learned from my short time here that Australia is really one of the world's leaders in innovating here in some ways you've gone well beyond where other countries have so hats off to you. In terms of academics and government I was privileged to work for President Obama and I'll just make one little notation. I learned early on maybe in the first week that the characteristic academic skills are not a positive in government and in some ways they're a negative so it occurred to me I had in public policy part of my background is in behavioral science and in nudge related work and before I even used the word nudge in government it occurred to me if I said this is a good time to nudge the best response might have been it's a good time for you to go back to Cambridge and that's related to what I'm going to be talking about today. So there's obviously a concern on the part of some that self-government and uses of behavioral science are potentially on a collision course and there is sensitivity on the part of citizens of a democratic nation about uses of psychology and behavioral science to make policies more effective and that concern is something we should celebrate it's part of what a free society brings up. So one thing I've been involved in the last few months is trying to figure out what people actually think the answer is matter in a democratic society if you get a green light from the public that's important an important fact if you get something like a red light that's not only an important fact it might have some value in trying to figure out when you've gone wrong and maybe crossed an ethical line. I'm going to give you some US data there's a lot more from other countries and I'll give you a hint of that. So here are some popular nudges in the United States. Calorie labels, overwhelming support for calorie labels, graphic warnings for cigarettes of the sort that you have here many nations have, very strong support three-quarters automatic enrollment and savings plans supplemental to mandatory savings there is strong support for government encouraging and there's strong support for government requiring a default rule to this effect. So a nudge that takes a form of above the mandatory a default very strong support. Traffic lights for food that's more aggressive than calorie labeling red for unhealthy green for very healthy Americans like that very strong majority support to my great surprise there is strong support for automatic enrollment in green energy in fact over two-thirds of Americans favor a mandate that companies automatically enroll people in green energy subject to easy opt out if it's more expensive. Americans are nervous about a mandate they're supportive of a nudge a campaign to come combat obesity you get overwhelming support for that and so too a campaign to combat distracted driving to my immense surprise the approval in the cases I've given is bipartisan we do not observe differences across party lines whether people are liberals or conservatives they're supportive of the things I've just described people don't like subliminal advertising to encourage healthy eating are you amazed at that Americans don't like the idea that the government would mandate subliminal advertising and movie theaters in fact I use that as a kind of reality check for my own survey if people like that I get worried about my survey fortunately people don't like that people also don't like automatic charitable deductions they strongly oppose the idea that an employer private or public would say you are presumed to give a small portion of your money to charity people are against that I think the underlying principle is that people get to decide actively and not by default where their money's going people don't like an educational campaign to get mothers to stay at home to take care of their kids I think they think that reflects illicit values insofar as the government is not operating pursuant to legitimate goals and insofar as the government is acting inconsistently with the values and interests of choosers there is going to be nervousness about behaviorally informed approaches but so long as those principles are complied with people are enthusiastic about choice-preserving interventions to my near astonishment the results in the United States are replicated essentially identically in France, Germany, Denmark, Italy, Hungary and the United Kingdom you're the first people who are hearing this data it hasn't been published yet it's just been collected but as a first approximation with some variations that aren't that relevant for now there seems to be a consensus across democratic nations in the organizing principles I've just described okay in the United States there is a centralized entity called the Office of Information and Regulatory Affairs it has the unpronounceable acronym OIRA that's not that's pre-behavioral science that acronym I was privileged to oversee that office in the first term of the Obama administration there are two basic ideas regulations have to be justified and subject to cost benefit analysis and there will be managerial control and interagency coordination those are the dominant ideas and notice if you would that the office has veto authority which is to say that regulations that are submitted to it are not going to be issued unless it approves of them with effective appeal to the the president so the organization a little different from what I'm learning about Australia is that there's a no opportunity for a minister or cabinet department to issue a regulation without that office's approval except that if the office is acting in an idiosyncratic or eccentric way it will retreat and accept that the president of the United States has ultimate say the benefits have to justify the cost less restrictive and burdensome approaches must be considered and that is an invitation to choice preserving behaviorally informed interventions and distributional considerations equity and fairness can count in fact president Obama made one a kind of historic change in the catalog of non-quantitative values that play a role in regulatory decision making it has implications for behavioral science as well as more generally and that is he uses the term human dignity as a foundation of his principles for regulatory judgment okay here's a little tale that picture is actually a candid it wasn't posed and it's relevant to here during one of our not very exciting government shutdowns when congress and the president were at loggerheads and the government actually shut down do you remember that we're not proud of that we don't think that's an excellent moment for our country but some of us got to go in and it's you know enough of a privilege that that's the right phrase we got to go in even in the midst of the government shut down and I was walking across to the White House and I heard someone call my name and it was the president and while I worked with him at the University of Chicago so it's not that odd he's president now and to hear him call one's name while you're walking that that's not usual and that conversation was one in which he was facing a very difficult domestic situation but he really wanted to talk about regulatory policy and to my amazement during the midst of not quite a crisis but a very difficult situation he said we have to focus very much on simplifying our regulatory structure eliminating things that are too burdensome for people finding ways to increase simplicity and using if we can behaviorally informed approaches to to help serve the American people better okay that's related to what happened in 2012 which is something like a constitution for our regulatory state it has a not very exciting name executive order 13563 can you remember that 13 is kind of an unlucky number does 563 have any athletic resonance I saw some sport on TV last night that was very hard to understand they were falling down a lot is 563 relevant to that sport okay well we don't have a mnemonic maybe you can think of one okay this executive order from 2012 has a provision it's short this provision says each agency shall identify and consider approaches that reduce burdens and maintain flexibility and freedom of choice for the public and the bold letter is can be understood as a reference to behaviorally informed approaches warnings default rules and disclosure requirements as well as provision of information to the public in a form that is clear and intelligible okay September 2015 very recently the president issued a new executive order which is basically the behavioral science executive order and in terms of our operations in our government what happened just a couple of months ago it's a genuinely historic event to understand its magnitude note if you would that an executive order from the president has the force of law it is binding on the rest of the federal government president has directive authority over those who work for him and this is like law and you're just seeing quotations from the executive order which tells the government to design its policies in a way that reflects the understandings that behavioral science has called up it requires agencies to identify chances to help qualifying people who may not be able to benefit by from programs by removing burdens shortening wait times and simplifying forms using the content format timing and median to facilitate comprehension consider how presentation and structure of choices can effectively promote public welfare including use of default settings and here's potentially the biggest one review elements of policies and programs that are designed to encourage and make it easier for people to take specific actions by considering timing and opportunities of youth for use of non financial incentives okay here are some practical challenges that I think all governments face I thought of this what I'm about to tell you many times when I was in the government and I've thought of it frequently since at the University of Chicago where I taught for over 20 years there was a very distinguished older professor who in response to any new idea would say either we did that or we never did that and those two answers exhausted the possibilities there was nothing that they either did or didn't do that's a hundred percent which meant any new idea would be bad it was already done or of course it wasn't done the best I think way to to face down this kind of devastating we did we never did is to notice that government is usually problem-driven not theory-driven those of you who work for the government are completely aware of this did to bring abstractions down to policy makers or bureaucrats is not an excellent idea to use either persuasion by emphasizing the potential benefits of one or another approach as has been done by David Cameron's group in the United Kingdom and frequently by the U.S. analog or to use authority by saying this is actually what has to happen either of those are good if you have authority use it that's quicker but otherwise persuasion my most surprising moment in the U.S. government actually there was one that was the most stunning as our president issued an open government memorandum which was followed by a directive from the office of management and budget where I had part of the lead and we required the rest of our government to do lots of things to open government up to the American people including having a website called data.gov that now exists which has a ton of information available to the world we had an initial meeting with the rest of our government many of them civil servants to talk about implementation of the directive and my feeling in the pit of the stomach when we had the meeting which I was running was a little like the feeling of the pit of the stomach when you're taking a test you know you're going to fail or encountering a group of people who you know don't like you this is going to be a difficult meeting to my stunned surprise the meeting was electric with excitement that the people in the government were thrilled at the idea that the particular problems they solve wanted to solve they now had a kind of license from the policy makers to go forward and use their own creativity so there was a kind of unleashing of innovative capacity on government's part and the hope is that that's what we can observe in the behavioral domain okay there's a nudge big elephant is nudging a little elephant that's a scandalous nudge the men know that's a urinal women if you haven't seen one before that's exactly what they look like but this isn't just any urinal this is a urinal from the Netherlands airport the fly you see in the urinal that's not a real fly that's a painted fly and the reason for the painted fly is that there's a bad problem a spillage in the airport and the thought was that men could be nudged to aim better and the consequence of the painted fly was to reduce spillage by 44 percent I don't know exactly how they measured that and I don't think I want to know but apparently men once they see the fly can't help but aim at it now what's revealing about this example is not only that it helped reduce a not completely trivial problem but that it shows the great relevance of attention in human decision making reminders I think are the sleeper nudge as through text messages and reminders are the equivalent of a painted fly they bring something to people's attention this is an actual postcard someone recently sent me from Germany I don't speak German it's a real postcard now I don't think I don't speak German but I think I understand that that postcard okay here are some uses of behavioral science default rules disclosure warnings reminders oh sorry okay I'm just trying to make sure you're paying attention that's like a fly okay there we go choice architecture is of course a way of dealing with one or another problem and choice architecture should be designed for choice architects as through a requirement of cost benefit analysis that is choice architecture for choice architects I have a number for you which is a hundred fifty billion dollars and that number is the net benefits of federal regulations in the first term of the Obama administration which is a reflection of the president's concern in an economically challenging time to be extremely disciplined about regulatory output and to ensure that the regulations that are issued either have the principal consequence of just eliminating costs and some of those billion dollars are from cost elimination or of having benefits that dwarf costs the president recently said just a few weeks ago he said publicly we don't issue a regulation if the benefits don't exceed the costs and that reflects actual practice that was his direction to me and that's the data okay what I'm going to do now is just give you a list of behaviorally informed initiatives from the U.S. government hoping that each of them will be of some interest in its own right and also possibly suggestive of other things that might be useful here so that's the basic goal if there's a problem we have in the United States that there are children who are eligible for nutritious school meals they're poor they're entitled to the food but the parents don't sign them up why don't the parents sign them up we don't know for sure but they might be busy frightened suspicious or confused there are various ways that those problems could be addressed through a simplified less threatening or completely clearly unthreatening communication from the federal government but those are labor intensive and it's not clear that they'd work so the initiative instead is called direct certification it says that if you local government or school know these children's children are eligible given what you know about their economic situation then they're in automatically and the result of the program as of last accounting was to certify 12 million children for meals to which they're legally entitled it was just a nudge just switch the default rule Federal Reserve Board in 2010 was concerned very much about the problem of people automatically enrolled by their banks in so-called overdraft protection programs it's a nice term isn't it overdraft protection programs one wants to be in one of those the problem is if you're in an overdraft protection program and you go over your checking account you will be taking out the equivalent of a very high interest loan possibly as high as 7,000 percent and people haven't assigned up for those loans the Federal Reserve said banks you cannot do that and it emphasized both the importance of the default rule and the risk of unrealistic optimism significant results have been observed from the switching of the default rule where a lot of people aren't paying those high interest loans because they're not in those programs I know the savings issue has particular resonance and wrinkles here our president has tried to supplement our social security program not through additional mandates but through automatic enrollment that has been a transformative set of initiatives from the private and public sector here you can see the magnitude of the transformation and if the savings issue particularly seems for other countries think of this as a tribute to the power of automaticity at every level of the income distribution we're seeing very significant increases in participation rates by virtue of automatic enrollment the stunning number I think is the one that involves people at the lower end where they're more than doubling their participation rights by view of automatic enrollment and that is likely to have very significant distributional impact in the long term where people who are likely to struggle particularly in older age are going to have a pot of money from which they can benefit in Germany there was recently a randomized controlled trial involving about 40,000 households in which 20,000 were asked if they want to opt in to cleaner energy the result was relatively low and the best predictor of whether people were going to get in was whether they were in the green party the other 20,000 were automatically enrolled in green energy and were told if you want to opt out go for it it's easy that increased participation rates by 10 fold and after the automatic enrollment program was in for people who were in that condition whether you were in the green party had no relationship to whether you ended up green that's kind of the German version I think of what you're now witnessing on the slide for the public policy problem which Germany is keenly concerned to address which is the clean energy problem notice that this is a an essentially costless intervention notice also that the participation rates increased for people who actually had to pay a little more for green energy notice as well that a follow-up suggested people completely knew what they were doing they weren't tricked or trapped they thought instead I'm in green energy okay that's fine the people who stayed in okay now that's the study a little tiny footnote to the study is that if you have a default rule in favor of double double-sided printing you can save a lot of money easily much more than through education about paper use which saves approximately zero money and much more than taxing paper use which has a smaller impact okay there's the old United States Department of Agriculture food pyramid and what I found in in our government was that many of our interactions with the American people were basically like this now let me explain what this is this is something designed by experts who worked really hard on it so this is not designed by people who were cruel or mischievous they're good people and they know what they're doing and what they thought was if we take a person gender unclear that's good this is not a guy or a woman it's just a person walking to the top of a pyramid we will provide some clarity to people about what they should be eating now ask yourself have they succeeded in that task there are stripes of various colors aren't there in the pyramid do you understand what those stripes refer to I work on this stuff and I actually have no idea I think at one point I probably knew I have no idea is red mapping on to some kind of food group maybe can you recognize the foods in the slide is any of them recognizable I recognize only one food in the slide it's on the bottom right and that's very clearly a shoe is the government suggesting you should eat eat a shoe did we eliminated that and did this instead this is the food plate which says essentially make half your plate fruits and vegetables and if you do that you're on the way towards a healthy diet our food plate has gone viral in the United States it's in Spanish it's being used all over the place and it gives clarity now in government I think the following idea is a good organizing theme plate not pyramid it's good if you're a parent also plate not pyramid and I'll give a little explanation of why that it seems to be a useful organizing term I had a friend who was involved a couple of years ago in a very high level negotiation with another country from the United States the negotiation was not with Australia it was not with Russia it was not with Israel didn't have that level of tension in it but it had a potential tension I should say but it had was important and nothing had developed at the time president was going in a couple of days and we had no agreement with the country that's not good if the president is going to another nation there should be something that's a product of the visit my friend was there to try to rescue the situation and it looked doomed and I talked to my friend the night after the negotiation took place expecting failure and I asked how did it go when the answer exploded in my cell phone great and I said how come how did that happen and the answer was plate not pyramid and that's my phrase I had no idea what it meant in that context and I asked what did what do you mean and the answer was that the negotiation was going badly because we had presented something like this and the other country said no once we presented something like this with eight things each of which was crystal clear the other country said well six of those look good let's talk about the other two which is a suggestion that when there is non-compliance or a failure to benefit from a government program a failure of usage it's often not because of resistance it's because of confusion and that if one can make clarity then things that otherwise fail can kind of snap into line okay here's the old fuel economy label in the united states this has our measure miles per gallon and I'm thinking that every country has its equivalent of miles per gallon meaning not some other number that is identical in meaning but some other unhelpful term that only specialists understand miles per gallon what that maps onto that matters is extremely unclear in terms of environmental effects or economic effects if you know what the miles per gallons are you don't know much you have to do a translation exercise we abandon the old fuel economy label in favor of this and this may be a bit too cluttered there's a we did some data to suggest whether that this would be pretty good but to iterate it is a very good idea here are two things to notice about the new one it tells you your annual fuel cost in big letters and it tells you how much you are going to spend or save basically over the life of the vehicle so it gives you something you care about it gives you a measure that is like a plate okay our consumer financial protection bureau has a mantra know before you oh I think it's a good mantra it is saying not that we're going to have aggressive regulation of the financial sector in order to produce the form of interaction that we the government think best between consumers and banks saying we're going to work very hard to make sure that people actually understand what they're getting into the subprime crisis was in large part a failure of understanding and there are things to do to make know before you owe a reality this is 2014 our food and drug administration which is altering its nutrition facts panel to try to increase clarity about relevant features of potato chips ice cream etc and it emphasizes the behavioral economics findings especially about present bias and salience which are suggestive of how to make one of those better I believe Australia just joined the open government partnership does one of you know know this is true some of you are nodding very recently the open government partnership was created a few years ago it's worldwide it's not a you know narrowly let's say western nations effort to promote western understandings of how government should work it's using what are seen as more universal values of openness to promote a multitude of goals my plea is that Australia might as other countries have found possible exploit participation in the open government partnership as a way of developing national action plans to make their own governments work better my experience of the U.S. government when we joined the open government partnership was this is great for the world but it's a bit challenging we the United States have to generate a national action plan in view of the limitations of time an additional task is not always welcome but it turned out that our own national action plan actually helped us to serve the American people much better and as the program works it's done a little bit new plans basically every year or so and there it is blue attractive yes okay you already saw this this is making sure you pay this is a reminder okay fuel economy rules here we're speaking not of nudges or choice preserving approaches quite but of more aggressive regulations that have a behavioral foundation so just notice here that in the United States fuel economy rules are getting much more aggressive in a relatively short time and I'm going to say something in a moment about the behavioral foundations of that initiative okay at the same time that the president issued his executive order on behavioral science the White House social and behavioral sciences team issued its annual report and it's a long report I'm just going to give you a flavor an email campaign to increase savings by service members nearly doubled enrollment in federal savings plans it's a significant boost simple test text messages to lower income students reminding them to complete forms this is a lot like the fly on the urinal increased college enrollment by 5.7 percent farmers are allowed to get some loans from the federal government on favorable terms but they seem like background noise often the communications a new outreach letter significantly increased the percentage of people who obtained loans adding a new signature box on an online form requiring self-certification of self-reported sales produced an additional $1.59 million in fees in just one quarter now in the scheme of things $1.59 million isn't huge but it's suggestive of opportunities to have choice architecture interventions that increase honesty okay I promise to tell you something about energy efficiency and behavior here's a quotation from the US government that bears on fuel economy and energy efficiency in general suggestion is that consumers might be myopic and undervalue the long term they might lack full appreciation of information even when it's presented they might be averse to short-term losses and they might not have sufficient salience with respect to information now there are a lot of mites here which is honest we need to have more empirical work on energy efficiency and human behavior but the mites are based on empirical research existing which suggests that energy efficiency interventions can often not just reduce externalities environmental and other harms but also have major effects in protecting consumers against economic losses okay our department of agriculture has gone big on behavioral economics using a wide range of behavioral findings to try to encourage healthier choices and there's a great deal of work on the problem of obesity and its aggravation by let's say bad choice architecture I know Australia like many nations that this is a very thin audience I know Australia like many nations is seeing a hike in obesity rates and there's lots of things that can be done that preserve choice that attack the problem okay if I had one wish for my government in the next six months I think this would be it in terms of uses of behavioral science that is not because it's necessarily the largest impact approach but because it's the one that can deliver the most short-term wins the idea here is that there are paperwork and reporting requirements all throughout the government which impose significant hurdles to participation in programs that involve small businesses poverty reduction help for people who suffer from mental illness or chronic pain which are the two problems that behavioral science has shown it's hardest for people to adapt to mental illness and chronic pain there are programs designed to help but sometimes participation in those programs is like navigating the food pyramid if we can free people up not to spend their precious time on paperwork and prevent programs from being undermined or defeated by complexity then whatever your policy goal it's likely to be achieved on the cheap through an intervention simplification of our financial aid form has been found to have the same impact on college attendance as a several thousand dollar increase in the per person subsidy if you have two choices for increasing college attendance give people a lot more money or simplify the form you probably should choose the latter a terrific program I'm sure you have your analogies here in the United States in some ways our best poverty reduction program is the earned income tax credit with respect to economics health children's well-being everything you care about under the sun it's a big winner but we don't have 100% participation rates take up is too low what can be done to make take up of programs increased often through simplification and default rules okay so there's a person in the U.S. government someone who I think is one of our best public servants good friend of the president I won't mention him but he has a great term which is in a meeting as ideas are discussed and arguments and counterarguments are raised he will say at a certain point okay we've admired the problem now we're going to what are we going to do about it the idea which a good cautionary note for academics or people with academic inclinations is that admiring the problem is often greatly overrated here is after three years the net benefits of federal regulations across the three past administrations now the bush ones are over three billion and while it's the smallest that is not something to you know sneeze at that's three billion dollars in net benefits that's pretty big but the Obama administrations it's now well over 150 billion through the five years through 450 this comparison sheet shows you the potential benefits of kind of consistent focus on evidence and numbers okay directions and new dilemmas I'm just going to tell you two sets of things about what seemed to me on the horizon often a good way to nudge people is just to ask them to make a choice we had a discussion last night of organ donation where it would be possible to have presumed consent so people just assumed to be organ donors not clear that's a good idea it may seem disrespectful to people but if you just ask people when they get their drivers license or whatever do you want to be an organ donor that can have a very significant effect on participation rates I understand from part of Australia the rates have rates have been dramatically increased just by asking people what they want if I ask you what I'm about to ask you and it's a pretty big group are you going to get a car in the next year I think I've just increased the purchases of cars from this group in the next year just asking people a question typically increases the likelihood of the relevant behavior even if they're not forced to make a choice because it brings it to mind active choosing is itself a form of libertarian paternalism it's steering people in a way that preserves freedom of choice and it's a good question what are the potential uses and limits of that as the simplest nudge of all an alternative is to use personalized default rules now often default rules are general they apply to the massive people but as government as the senator was suggesting has detailed information about people you can devise a communication or a default rule that is particularly suited to that person's situation that seems to me a wave of the future and while it's potentially threatening to privacy it also is potentially far more effective than anything else we could do okay there's a great basketball coach in the United States who says it's not what you say it's what they hear I had that phrase rippling through my mind in government because often our communications would result in hearing something that we hadn't said a single communication whether it involves taxes or consumer protection or poverty relief will often have very different meanings to different groups and the beauty of it is on the basis of evidence we can find out a savings default an environmental default may be poorly suited for some people and well suited for others that also suggests potential much more differentiation than governments have had in the past okay what we're learning with respect to poverty is that it's a little like loneliness and hunger and busyness if people have no friends they often have a hard time making friends because they're focused on their friendlessness which isn't very likable if someone is hungry then when they see a movie that let's say is about cricket but there's an apple on the screen they might think this is a movie about apples that's where their mind goes the problem with poverty is in a part in part a problem of limited kind of processing capacity which is overwhelmed by the fact that people have to focus on their financial situations if you ask people who are poor to take an intelligence test typically they're going to do about as well as people who are not poor if you ask people who are poor to solve a math problem and then take an intelligence test and you ask non-poor people to solve the same math problem and take an intelligence test they'll do the same they're about the same but if you ask poor people to solve a difficult financial challenge say their car is broken down and they have to come up with significant sum of money how are they going to handle that and then ask them to take an IQ test an intelligence test their intelligence plummets if you ask people who aren't poor how are they going to come up with enough money to fix their car and then take an IQ test as no effect on their IQ intelligence poor people's intelligence falls after the solve a financial problem inquiry by the same amount roughly as your IQ intelligence falls if you've had no sleep the night before which is to suggest the problem of poverty is often a problem of cognitive scarcity governments I think have not taken that problem sufficiently on board it's a behavioral problem MIT economist Esther Duflo has a passage discussing poverty saying that we often think that the problem poor people face is they don't take enough responsibility for their own lives but she says we should stop derating poor people for not taking responsibility and think instead of the ways in which people who aren't poor don't have to take responsibility because so many things are taken care of for them if we who are not poor do nothing we are on the right track if they who are under conditions of fear deprivation do nothing they are on the wrong track that's a suggestion that there are pleasing and comfortable default rules with respect to air quality water quality medical care education almost everything under the sun that people who are not poor benefit from that has policy implications I think for multiple interactions between government and citizens okay agenda focus on high costs and low benefits what are the best candidates for looking back at existing policies we need to know more about public approval and disapproval over the last decades there's been a lot of focus on performance standards being better than design standards don't tell people how to do things tell them what you want them to do also on incentives versus commands give people incentives not commands choice architecture I think has the same relationship to performance standards as those standards have to the design standards and the same relationship to incentives as incentives due to commands if you're with me they're softer and more freedom promoting okay here's a final word from the greatest of the many great Irish poets Yates of course don't wait to strike till the iron is hot make it hot by striking that's a nudge thanks extraordinarily disciplined and right on time very good so I think we have microphones available so that people can ask questions I have about a half a dozen questions but I want to use my privilege of being a chair so we'd like to ask a question good you pointed to the extraordinary results of auto enrollment to fellow people in low-income people in savings programs in Australia which presumably has an opt out right attached to it in Australia we never went down that route we we have compulsory superannuation nine and a half percent doesn't matter how dire your circumstances you've got to put nine and a half percent you can't opt out if we had tried that or if we tried it now do you think we'd still achieve fairly high and and appropriately high savings rates probably so the empirical question so be reckless of me to say anything more firm than probably but probably so I guess the policy design question would be is that nine and a half percent evidence-based in the sense that it's an optimal population-wide average without adverse effects on people at one or another end of the income distribution by international standards I guess it's high maybe it's working if there were something like let's say a five percent mandatory minimum and automatic enrollment for the rest empirical question what would happen you get a significant number of opt-outs undoubtedly question is where significant is intentionally ambiguous right I don't mean to say a percentage but more than de minimis and then the question would be would those significant numbers of opt-outs be disturbing because they're a reflection of present bias where people are just you know focusing on their current self and not caring about their future self or is it rational enough in the sense that people are thinking of income over the course of the lifespan and they're thinking you know I I need to pay off a loan now or buying a house now and I'm going to be fine so that that's how maybe one would think of it one thing that's I think interesting is the idea of nine and a half percent period or nine and a half percent exclamation point versus something that would have you know maybe seven percent and an automatic enrollment supplement or eight percent in an automatic enrollment supplement or you could imagine multiple designs and it's not clear it's certainly not clear that nine percent exclamation point is better than eight point five percent with automatic enrollment there was a question here in the front row by the way this half of the room if you don't ask a question you have to pay four dollars this half of the room if you do ask a question you will get four dollars so we're doing a little experiment here Just on the question of the public attitudes towards nudges you used the example early about people don't like campaigns to encourage women to stay at home is a flip side that they're actually comfortable with campaigns to encourage women back into work and is that or is it a sphere where people think government shouldn't be going People are very enthusiastic about education campaigns across partisan lines in all of the countries I described I'll give you one little qualification that I don't understand quite yet but in the moment but basically public education campaigns that involve what people perceive as a genuine social problem people want that if they think that the public education campaign is designed to it would transgress social norms as they are rightly understood people don't want that so they don't want women to be encouraged to be in the home I think they think that's retrograde I tried one basically as a in a way very extreme which was a public education campaign to make it clear to people that they can change their gender I thought that was going to everyone basically except for a very small percentage of people maybe five percent would be against that not because it's a public education campaign but because most Americans 2015 that's not the public education one would expect they want and people don't want that but some pretty high percent did something like 30 percent thought okay go for it let people know that the little qualification I've got is in Hungary all of the positive numbers basically are lower than in the other countries I think I understand that that there's a high level of distrust of government in Hungary right now and so anything like this is going to be depressed a bit significant lower numbers not massively lower but significant lower I think I understand that there's one that is more mysterious which Denmark looks like Hungary Denmark they're basically four education campaigns but less so than in the other countries and in some cases you'll have a 65 percent majority in most countries and in Denmark it'll be 48 percent unclear why just had a question about I think you mentioned that new regulations I presume it is have to pass a cost benefit test one of the recent report from the general accountability office in the US said that the federal government doesn't have a comprehensive list of federal programs and of course there's a large number of programs that don't have a good evidence base so it seems like there's a long way gone on regulation but not so far with programs so my question was is there a move in the US to get better evidence base of the effectiveness of programs so that perhaps monies can be moved towards more effective rather than less effective programs great so let's start with regulations every new regulation that has a degree of significance has to go through the process I described but there's a stock of regulations on the books and there's a way of knowing how many that haven't been subject to empirical reassessment that is a very serious problem and as part of the executive order whose name you remember five, six, three there's a regulatory look back requirement agencies are under every six months the initial returns from the empirical reassessment were very high subsequently the aggressiveness of the regulatory look back has been less than some people anticipated but there is a formal requirement and it could be energized in the next 10 years and we should root for that for program evaluation this is something that both the Bush Administration and the Obama Administration have emphasized and the level of evaluation of programs to get rid of those that aren't working and to devote funds to the ones that are is much higher than it was 15 years ago but to institutionalize it it remains a work in progress if for those who are interested in this there's a memorandum from the Office of Management and Budget I think maybe two or three that have the word evaluation in it and they involve funding requests so the budget is being transformed into an evidence-based budget now once the budget goes to Congress the relationship between the evaluation process and what emerges might not be one to one but this is as the just of your question suggests this is incredibly important what is the relationship between academia and government in the U.S. and how do they work together to do that? my understanding is very little so that the the evaluation of the regulations has no academic zero academic role it's all done internally the program evaluation I'm unaware of any academic evaluation though if academics do something that's useful then the government is all ears on the behavioral approaches what we've been discussing the academics have done some terrifically useful things and some of the things I describe grows out of academic work for academic evaluation of let's say an educational policy it's hard and the government's going to have a lot more data available to it than the academic institution this would be a good thing to promote more as your opening remarks suggested more engagement with people who quite know what they're doing to see how does the program look all right you mentioned before the fact that the effectiveness of education campaign is quite limited when they bump against social norms and I was interested in the relationship between kind of behavioral interventions and social norms and what kind of behavioral interventions seem to be nudging social norms or capable of nudging social norms so we don't have a lot of data and partly I think one reason is that there aren't randomized controlled trials so the way you'd want to do it ideally is to have a campaign let's say involving domestic violence in one community and then in another community and see what happens or to have five different domestic violence campaigns and then see what happens and on this area I think at least the governments I'm aware of are really at very early stages so absent a randomized controlled trial all we can do is have before and after pictures and speculation and the before and after pictures you can you can it is true that with respect to smoking and drunk driving there have been very significant reductions in multiple countries though the causal force of the public education campaign is hard to sort out I think the kind of theoretical interest of your question is under what circumstances would a public education campaign kind of catch a wave and promote an emerging norm and in what circumstances with a public educational campaign run up against a rock or maybe even prove counterproductive because it fuels an emerging norm that's running up in exactly the opposite direction so I think there's one little clue about there is some work on this the phenomenon of compliance without enforcement this is a beautiful phenomenon when is it the case that we observe compliance with the requirement with no enforcement and in many places smoking bans kind of automatically produce compliance you don't need the government to step in why is that it seems to be there's a sufficiently widely held norm already that once the practice comes in those who would want to smoke know that they will incur private sanctions and you need the law though to make the private sanctions sufficiently likely it might be without the law people would smoke people would say please stop smoking they'd say I have a right to smoke they can't give that answer anymore so that fits with at least one area where public educational education campaigns are promising they put the government's imprimatur behind a majority sentiment the qualification for the compliance without enforcement finding is there are some communities where compliance is zero or low because these are groups where smoking is consistent with the norm and those who want to stop them smoking look like intermeddlers or busy bodies and so the question is under what circumstances public education campaign going to look like intermeddlers or busy bodies okay so one way to get at this is to think the source of the message is extremely important sometimes as important as the content of the message so in cases where the message error is easily dismissed as fussy or other then there's a problem and I'm thinking of the domestic violence issue where I know there's a lot of interest here there are some communicators who would be like you know not very helpful but there are others who maybe would get people's attention if they look kind of relevantly like the people at whom they're targeted so one little idea about public education campaigns a source is often effective if the person's a convert or a surprise so if you have a former alcoholic saying don't drink that's better often if you have someone who let's say was engaged in domestic violence who is communicating and saying that this was you know the not only did I get punished I'm full of shame and I'll never get over it something like that that could be effective so I guess we have one back here and then one over here and then one here maybe it's a pattern it's a spiral you must not do this kind of thing you noted on one of your slides importance of learning from negative results I wonder if you could comment on a nudge that didn't work and what your thoughts were for why it didn't work okay so the the United States team has a couple of them as reported as not working the mind is a wondrous thing meaning that my mind has blocked out the content of the ones that have failed my understanding is that it's not the following intervention it's not clear it's always getting positive results so I want to phrase it in this tentative way but the intervention is have people sign forms first and you'll get more honesty there's a lot of good data suggesting that works there's some data suggesting it might not work and so whether that's a universally helpful idea unclear another one that may or may not work this might have been one of the ones in the US report is the use of social norms to get people to pay their taxes by pointing toward what the relevant community does it's not clear that's always going to work so if you have a group of people who are proud of the fact that they're not like their awful community of you know goodie goodies we don't pay our taxes here because we are proudly whatever then when they hear the people in their community pay their taxes well I'm not like people in my community so the the delinquent taxpayer issue is one where I'm not clear enough that there has been a negative result to use it as an example but there's a potential negative result I'll give you one okay I have one that I haven't suppressed that it's a beautiful one and keenly revealing which is the OECD as a test of the power of default rules turned down thermometers in the winter by one degree Celsius in winter that produced the result significant decrease in energy use then they decreased it by it for another group by two degrees Celsius the default setting had much less of an impact that I think is deeply interesting that the more aggressive default had a weaker impact than the weaker default on the goal which was decreased energy use that shouldn't have happened the reason it happened was that if your default setting is set down two degrees Celsius you're cold and you turn it up now the reason that is has a generalizable implication is you might think nudges in the form of default rules will work unless they make people too cold where cold means uncomfortable, mad poor whatever I'm interested in unintended consequences particularly the unintended consequences of a of a nudge intervention as it interacts with other parts of the regulatory framework there was a question earlier about Australian savings rates and you suggested one one approach might be to have a kind of default minimum and then additional top-up opt-in savings I think most of the locals in the room can can guess what would happen in that instance right now because of the interaction with our tax system you'd get enormous contributions at the top end and very little at the bottom how do you respond to something like that you suggested kind of it's an empirical question I'm I guess do you test and retest around what the right levels are and if so how do you do that at a small scale on something as universal okay great so this is related to another nudge which is imperfectly successful because it had an unintended consequence so unites the two questions the nudge I'm thinking of is automatic enrollment and savings and one thing that did in the early days that was not good was it increased participation rates but decreased contribution rates the reason it decreased contribution rates is the default contribution was low 3% and for the very reason that you increase participation you decrease contributions that's terrible 3% too low so something has to be done to make that unintended consequence not work it's a predictable unintended consequence it's what you should observe if the default is sticky okay so that would be not so good unintended consequence that was tested not through population-wide but just at firms not huge firms big firms what are we observing increases in participation rates decrease in contribution rates so it would be possible to do at I think in terms of practice whether in terms of political feasibility is another question but it would be possible to say okay at this firm we're going to have savings rate of 6% not opt in for the other though you could test that too opt out for the other and then see who's opting out one thing that bears on your point by the way about disparities between rich and poor you might expect that under an opt out design in a thing where dollars are involved poor people are going to be opting out they need the money you might expect that there's data suggesting exactly the opposite that poor people don't opt out why do they not opt out because they're busy whether that's an opportunity or something to worry over I think is a good question people who lack education and resources are often less likely to use let's say the freedom of choice safety valve that might be good if you're really confident that you've got it right but if it's harmful for them not so much so the short answer to your question is it should be possible with you know with populations of hundreds just to see what's happening and you know undoubtedly there would be surprises hi I was really interested in your comments around poverty and cognitive capacity and it's something that we're definitely seeing when we work with more disadvantaged family groups that if we can make things simpler for them and remove some barriers that we can increase capacity and get them on a different pathway but what I'm interested in is the broader side of that is the social context how do you nudge the broader community to not look at those whichever client group you're talking about as others but to actually start to care about the programs that can create these inroads because I think some of the things that we see is that we know these programs work but we need broad community support to keep things going and often the groups that are seen as others I suppose in the community even more disadvantaged by the discrimination that they might get from the broader community that do see them as I guess not deserving or not making the right choices so how do you nudge the broader community when your focus is on better outcomes for disadvantaged groups okay so if the broader communities indifference or hostility to the programs matters in the sense that you can't get the programs going because they're unpopular that is a serious problem the phrase that seems to capture what is helpful is there but for the grace of God go I so if there's ability to inculcate an understanding that you know those of us are doing well probably got some luck of large magnitude through a lottery of some kind that's a way in now if there's good faith disagreement about whether the program is justified then it's not an absence of empathy it's kind of a policy disagreement and then have to talk about the policy thinking a little bit about the program to which I referred the earned income tax credit which is do you have something like that by the way do working people who are not earning a lot of money get a tax credit or a supplement some people are nodding apparently it's not the most well-known program in Australia or my barbaric accent is making the question inconferensible so that program is pretty broadly supported on the ground that the relevant group that is the working poor aren't people to whom there's large indifference I'm thinking about I don't have a good answer to your question which is one reason why I'm wandering I'm thinking that well-off democracy should be focusing on the mentally ill and people are suffering from chronic pain those are two groups that their arm doesn't work or if you've moved from one city to another and it's less nice or some other misfortune has hit you you can adjust to that one reason is attention that make the metaphor extend if you are if you don't see the fly then you don't pay attention to it or like a urinal without a fly just don't think about them but if you're suffering from chronic pain or mental illness then it is not possible not to be suffering maybe you can get used to some extent to chronic pain but that's hard those are two categories where empathy on the part of people who don't have these problems should be easy to trigger because there's there but for the grace of God certainly for chronic pain and for many people mental illness also I think we so there were two questions here you had one I think someone about four or five rows behind you so maybe you want to go first and drop there and then someone over there is going to ask you a question next thank you my question is about ways to collect evidence so we've talked about collecting evidence through randomized trials you've compared the results of policy programs clearly that can be expensive and raise ethical choices but so are there other ways using experimental techniques to help us in the design process and do you have examples of that great so what the interventions I described the various policies I don't think one of them was a product of a randomized trial they either borrowed from academic research which suggested they would work or they were a result of quasi experiments or web websites so for the redesigned fuel economy rule just a lot of people were interacting with websites and then various questions were asked do you understand this what kind of car would you buy given this and that provided information so using even relatively small groups that are on the internet or brought in to see their comprehension and behavior it's not as good as a randomized controlled trial but it's cheaper also you can sometimes have before and after pictures it's hard to control for the variables but if the result is large enough and the situations are proximate in space and time enough you know this is probably what did it thank you Cass the public sector are relatively new to behavioral insights but in the private sector people have been using knowledge and behavioral insights for a very long time so I wonder how do we think about the scenarios in which public policy and private actions interact and specifically I guess I draw on the example of overdraft protection in the US where though the government came up with a policy to get rid of that protection for a lot of people banks were quite successful in keeping people within the system of loss of version and other behavioral levels right so the banking example I gave you a very cheerful version and I basically believe it but not everyone does the fact is that the level of overdraft protection participation was incredibly high in the United States before the rule a lot of people hoped the rule would cut the level of participation in these programs you know close to zero it didn't the program cut to somewhere between 20 and 50 percent across different banks and one reason as you say that they got people involved was they sent ads out saying please check one of two boxes yes exclamation point I want to keep the overdraft protection that I've long enjoyed no I want to lose my long term the protection I've enjoyed and people check yes so they're agile at that I guess one question is whether the program is one that the regulated sector is very unhappy with or whether it likes it in the context of the environment and savings it's possible that the regulated entity is very happy with the government in the context of calorie labeling or things that are know before it's possible that the private sector will be unhappy I think all that can be done is to to have a continuing process so that if there's an agile effort to counteract what the government has done then maybe that effort itself needs scrutiny if it involves if it imposes costs that exceed its benefits so the banking what I'm not quite sure of I'm not quite sure how to think of the participation maybe those are people who need a convenient even though frequently high interest loan the dollar amounts aren't high what else are they going to do they're going to go to payday lender that's probably worse it might be okay but the private sector's agility at counteracting of course that's something to keep in mind one thing I'd say by the way about the private sector since I've been out of government I've been intrigued by this at least in the United States I'm sure if this isn't true here soon it will be the private sector is much more disciplined and creative in using behavioral science than it was five or six years ago so as much as there's increased government use of the material the private sector is not you know a long term user but is now getting up to speed and sometimes as you say way ahead of government that's often an opportunity as well as a challenge it's an opportunity if the private sector's incentives are the right ones so there are companies all over the world that are interested in combating obesity and in promoting healthier choices they think that's economically beneficial for them and they think it's a social good and they're using behavioral strategies CVS you know the company consumer value services CVS has gone kind of behavioral in its behavior so to speak partly because it's really focused on health and that's defining its mission great I think we're we're at time can I ask you one quick question which is about the child the child breakfast program and child meal program in the US you said you wanted these programs to be choice preserving to what degree may parents have chosen that they don't want to accept government assistance because they have some strong political they're completely free to opt out so if you don't want your kids to be in those programs go for it so what one analogy do you have automatic voter registration here do you have to register to vote or are you it's compulsory no we're not it's quite relevant to your question because you might think what if people don't want to be voters I guess that is inconsistent with the norm but take this again as an analogy if not the example doesn't resonate Oregon and California have just adopted automatic voter registration so people if they know you're a citizen you're a voter you don't have to register but you can opt out we have a low income tax offset which is like the ITC but less cover for the population so anyway thank you very much