Wednesday, August 07, 2013

Nudge Database IX

This is Part 9 of the Nudge Database.  
Part I || Part II || Part III || Part IV || Part V || Part VI || Part VII || Part VIII || Part X || @Makeuya

Nudge: The author conducted a natural field experiment on conditional cooperation where cross-country skiers in two Swedish ski resorts were faced with the decision of whether or not to contribute to ski track funding. Ski-tracks in Sweden are public goods and it is not legal to charge for access to such facilities. 

The results indicate that a higher share of the treatment group contribute (25%) than the control (21%); that is to say that the share of subjects contributing was significantly greater in the group receiving information about others’ behavior than in the group that does not.

Tags: social proof / charitable donations 

Source: Heldt (2005), 'Conditional cooperation in the field: Cross-country skiers' behavior in Sweden', Working Paper  

Nudge: The authors ran a door-to-door field experiment in Ohio to test the efficacy of an anchor on charitable donations. Of the 640 people asked for donations, 20% gave money. Of these 128, those told of the $20 anchor donated significantly more than the control. 

They also found that adding the phrase “even a penny would help” more than doubled the compliance rate from 15% in the control group to 34%.  

Tags: charitable giving / anchoring 

Source: Fraser, Hite & Sauer (1988), ‘Increasing Contributions in Solicitation Campaigns: The Use of Large and Small Anchorpoints’, Journal of Consumer Research

Nudge: The authors conducted a field experiment looking at the effect of matching contribution offer in conjunction with legitimization of paltry contributions (“even a penny would help”) in a door-to-door (n=320) charitable solicitation context.  

Results indicated that the matching funds offer, paired with legitimization of paltry donations, increased both compliance rates and donation sizes and generated greater revenues than either tactic used singly. 

Tags: charitable giving  

Source: Fraser & Hite (2006), ‘The Effect of Matching Contribution Offers and Legitimization of Paltry Contributions on Compliance’, Journal of Applied Social Psychology

Nudge: The authors ran a fund-raising field experiment to see the effect of providing social information on contribution rates (n=225). There were three conditions; (i) Donors who were told information about another donor’s contribution which is above the donor’s previous (last year’s) contribution, (ii) donors told information about another donor’s contribution below the donor’s previous one and (iii) donors told information about another donor’s contribution which matched their own previous one. The messages were in the form “We had another member, they contributed $X. How much would you like to pledge today?”

They find that respondents change their contribution in the direction of the social information; increasing their contribution when the social information is above their previous contribution, and decreasing their contribution when the social information is below.  

Tags: anchoring / social proof / charitable giving 

Source: Croson & Shang (2008), 'The impact of downward social information on contribution decisions', Experimental Economics

Nudge: This paper looks at the efficacy of many different kinds of energy efficiency labelling (3 examples included) on preferences for household appliances. Using a choice experiment with many labeling treatments, the authors find that simple information on the economic value of saving energy was the most important element guiding more cost-efficient investments in appliance energy efficiency, with information on physical energy use and carbon dioxide emissions having additional but lesser importance.
The authors note that the degree to which the current EnergyGuide label guided cost efficient decisions depends importantly on the discount rate assumed appropriate for the analysis. Using individual discount rates elicited in their study, they find that the current EnergyGuide label came very close to guiding cost-efficient decisions, on average. However, using a uniform five percent rate for discounting—which was much lower than the average individual elicited rate—the EnergyGuide label led to choices that result in a one-third undervaluation of energy efficiency. 
Labels that not only nudged people with dispassionate monetary or physical information, but also endorsed a model (Energy Star) or gave a suggestive grade to a model (A-G), had a substantial impact in encouraging the choice of appliances with higher energy efficiency.

Tags: energy efficiency / labelling 

Source: Newell & Siikamäki (2013), 'Nudging Energy Efficiency Behavior:  The Role of Information Labels', Discussion Paper

Nudge: This paper conducts two field experiments to test inter-temporal choices in charitable giving by varying the timing of commitment and payment. Monthly donors were asked to increase their contributions (1) immediately, (2) in one month, (3) in two months. 

The results are consistent between the two field experiments; firstly, mean increases in donations are significantly higher when donors are asked to commit to future donations. Secondly, follow-up data shows that the treatment effect is persistent, making the strategy highly profitable to the charity. Finally, there is evidence of heterogeneity in the response to different timelags, indicating differences in inter-temporal choices among donors. 

Tags: charitable donations / inter-temporal choice 

Source: Breman (2011), ‘Give more tomorrow: two field experiments on altruism and intertemporal choice’, Journal of Public Economics

Nudge: This paper argues that the low volition and collective nature of tax-funded benefits are primary causes of low satisfaction with tax payment.  

Three studies suggest that providing people with the opportunity to allocate some of their tax payment (here, 10%) across budgets provided by the billing party introduces (i) volition into the payment process and (ii) increases the perceived benefit associated with tax payment. As a result, taxpayers are significantly more satisfied with paying taxes, despite the fact that their payment amount remains completely unchanged. 

In addition to enhancing taxpayer satisfaction, an allocation program, if well-implemented, could also provide some hope for correcting existing lack of voice, address disconnects between spending and taxpayers’ priorities, and increase civic engagement in general. 

Tags: tax / volition of payment 

Source: Lamberton (2013), 'A Spoonful of Choice: How Allocation Increases Satisfaction with Tax Payments', Journal of Public Policy and Marketing

Nudge: The authors tested differ letter framings on the tax reported behaviour of over 7,300 sole proprietors in the U.K. The different treatments were offers of assistance with tax forms, rational argument and threats of audit. By and large the treatments proved effective at encouraging taxpayers to declare more, with the threat messages being the most effective. 

Tags: framing / tax 

Source: Hasseldine et al. (2007) ‘Persuasive Communications: Tax Compliance Enforcement Strategies for Sole Proprietors’, Contemporary Accounting Research

Nudge: A field experiment in Minnesota in 1994 tested the efficacy of normative messages in letters to taxpayers. There were 3 conditions in total; 2 treatments and a control, each consisting of 20,000 people.  

The first treatment group received the standard tax letter plus a rational appeal for paying their taxes (“your taxes fund local services such as X, Y, Z”). The second treatment received the standard letter plus a social normative message (“People who file tax reports report correctly and pay voluntarily 93% of the income taxes they owe. Although some taxpayers owe money because of minor errors, a small number of taxpayers who cheat owe the bulk of unpaid taxes”). 

The results found no significant effect of the normative messages on tax declarations. 

Tags: framing / tax / normative messages 

Source: Blumenthal et al. (2001) ‘Do Normative Appeals Affect Tax  Compliance? Evidence from a Controlled Experiment in Minnesota’, National Tax Journal

Nudge: The authors used financial incentives to encourage healthy lifestyles in a workplace (n=406) in Northern Ireland over a 12 week period, with a follow-up check after 6 months. The participants were put either into a Incentive group (Treatment, n=199) or No-incentive (Control, n=207). Those in the Incentive group had to monitor their physical activity levels and used a loyalty card to collect points and earn rewards. The control group used their loyalty cards to monitor their activity level but could not earn points or rewards.  

The results found no significant difference between the groups in terms of minutes of physical activity recorded either after 12 weeks or after 6 months. 

Tags: physical activity / financial incentives 

Source: Hunter et al. (2013) ‘Physical activity loyalty cards for behavior change: a quasi-experimental study’, American Journal of Preventative Medicine

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