Behavioural economics attempts to integrate insights from psychology, neuroscience, and sociology in order to better predict individual outcomes and develop more effective policy.
Much of the focus of Behavioural economics had initially been on trying to work out how and why consumers make choices, but this has extended into the political, social financial and educational spheres. Politicians are now interested because you can tweak or nudge , for example, welfare and social services to encourage individuals to make decisions or, indeed not to have to make decisions in some instances , that benefit them ,but also the state.
Making decisions is not easy. Some decisions are carefully thought through, others are seemingly random. There has long been an assumption that when we make choices we will, because we apply reason, make, more often than not, choices that protect and advance rather than damage our interests. But its increasingly clear that sometimes, rather too frequently, we make poor decisions. Are we making a decision based on reason or emotion, for example? Can we get beyond our own cognitive biases? If we have several options don’t we occasionally, confused, make the wrong choice?
We also tend to follow the crowd, which means that peer comparisons form an important part of the ‘choice architecture’. That can lead us down the wrong path. We also tend to be more comfortable with the status quo and resistant to change.
Science tells us that, for a number of reasons, it is often the case that even mature, well informed ,well educated adults can be poor decision makers and make the wrong choices ie those which set against an objective benchmark are against their interests. Impetuous Youth of course can make very poor long- term decisions. Indeed, Behavioural barriers may be preventing some students from improving their long term welfare. So, the comparatively new discipline of Behavioural Economics regularly unleashes unsettling counter –intuitive insights about how our brains work and how we make decisions.
A new report says that we tend to have frequent difficulty in making short and long-run trade-offs. Higher cognitive areas like the prefrontal cortex, which underlie executive functions such as planning, working memory and self- control, take longer to mature and improve than parts of the brain that correspond to motor and sensory processing.
Education represents a relatively new avenue which is undeveloped for behavioural economics, so its one that holds many opportunities and much potential. (watch this space !)
For example, apparently, executive brain function, which helps focus on the future and control impulses, does not mature fully until an individual is in their mid-twenties, children and adolescents are even more susceptible than adults to whats termed “behavioural barriers” which may lead them to miss out on education opportunities.
The Researchers categorize these barriers into four categories: 1) some students focus too much on the present, 2) some rely too much on routine, 3) some students focus too much on negative identities, and 4) mistakes are more likely with many options or with little information.
The immaturity of a child’s brain of course also provides opportunities. Students may be more responsive to interventions that target behavioural barriers.
This new research suggest that interventions shaped by behavioural theory are likely to be cost-effective and easy to implement, while delivering significant results. According to researchers, ‘They are exciting, testable and tenable.’
Behavioral Economics of Education: Progress and Possibilities- Adam M. Lavecchia University of Toronto;Heidi Liu Harvard University Philip Oreopoulos ,University of Toronto, NBER, CIFAR and IZA
Discussion Paper No. 8853 February 2015