Henry Ashworth of Portman Group on Behavioural Economics
Although long, this fascinating video by Henry Ashworth, Chief Executive, Portman Group is well worth a watch. He begins by telling us a little bit about his history and his perhaps unlikely journey into his current role in the alcohol industry before discussing in more depth what Behavioural Economics is and how it can be applied to help policy change.
Henry and his wife bought a beach cafe on the Cornwall coast and transformed this into a “ski resort” bringing kite surfing to the UK for the first time. This led him into a social innovation scheme in the local area with the RNLI. He was then involved in helping to modernise Newquay and rebrand it as the surf capital of the UK. In a similar way to ski resorts, beach resorts have to achieve the right balance between their daytime and night-time economy. This gave him the hands on experience he needed when working in the Behavioural Insights team in the cabinet office and in his current role trying to reduce harm caused by alcohol.
Behavioural Economics, otherwise known as Nudging, is all about helping people make better choices – in this situation ‘better’ simply means the choice you would have made on looking back and reflecting on the decision. Did I get the balance right between living for the moment and planning for the future?
Actually it is very simple – you can change behaviour without changing minds. The environmental influence on the way we make decisions is much stronger than we appreciate. We think we are, and are expected to be, perfectly rational people but in reality we are predictably irrational.
There have been many studies in this area leading to the government creating a book called Mindspace to use as a framework for policy makers – click here for the discussion document. The title is a pneumonic:
Messenger We are heavily influenced by who communicates information
Incentives Our responses to incentives are shaped by predictable mental shortcuts such as strongly avoiding losses
Norms We are strongly influenced by what others do
Defaults We “go with the flow” of pre-set options
Salience Our attention is drawn to what is novel and seems relevant to us
Priming Our acts are often influenced by sub-conscious cues
Affect Our emotional associations can powerfully shape our actions
Commitment We seek to be consistent with our public promises, and reciprocate acts
Ego We act in ways that make us feel better about ourselves
Below are some examples of studies to illustrate this further:
If someone wearing a suit crosses the road despite a red man, others are likely to follow as they trust that person’s decision making abilities. Similarly, if you are trying to communicate with 17 year olds you will have most success through someone like them who uses language they relate to.
Working with the HMRC Self Assessment tax department, by analysing the social norms both nationally and regionally, the Behavioural Insights Team redesigned eight different letters to send across the country which immediately increased success in collecting self assessment tax. This not only increased tax revenue but helped show this government how effective trials can be rather than immediately implementing big costly policy changes.
According to a study by the Department for Education, in the last 8 years the number of 11-15 year olds who have had a drink in the last week has dropped by 60% – a massive change. In fact 90% have not, despite what we hear in the media. This is where policy makers should be better at publicising positive social norms so parents are aware of this and can use it to discourage their children from doing what they wrongly think is normal.
Signs in doctor’s surgeries saying how many people have missed their appointment that month actual say to people that, if that many others have done it, it is ok if they do too. There was a 30% increase in the number of people making their appointments simply by flipping this sign to “97% made it to their appointment” and instead of handing out a ready filled out appointment form, giving each person a blank card and asking them to fill it out themselves.
According to a study in an office environment, if asked if they would prefer to be brought fruit or chocolate the next day 70% of people would say fruit (this is particularly high if they are asked in front of others). But when the time comes, if no record has been kept of the original order, this changes to 70% chocolate.
In another study, people were given 120g or 240g boxes of stale popcorn. Despite the fact this popcorn is not very nice, the people with the 240g boxes ate 43% more. This study is particularly relevant to obesity and alcohol policy. There is a very fine balance between reducing portion sizes for health benefits and ripping off consumers.
Click on the link to view more videos from Henry Ashworth
COMPANY INFO: The Portman Group was established in 1989 by the UK’s leading alcohol producers. Its role was to promote responsible drinking; to help prevent alcohol misuse; and to foster a balanced understanding of alcohol-related issues.
Since then the Portman Group has increased more responsible marketing within the industry and established the website www.drinkaware.co.uk which gives comprehensive advice to the public on responsible drinking. This is now the primary source of sensible drinking information for consumers.
In 2006 the Portman Group transferred all its educational funding and resources to a new charity, The Drinkaware Trust, in a ground-breaking initiative to tackle alcohol misuse. This meant that the Portman Group now concentrates solely on standards practised by the alcohol producers in areas such as labelling, marketing and social responsibility.
The Portman Group believes that a targeted approach with a focus on education and prevention is more effective than blanket controls in tackling alcohol misuse. Alcohol harm reduction measures should target the minority who misuse alcohol rather than the majority who enjoy a drink responsibly.