June 6, 2012

BSSR lecture Series: Behavioral Economics, Classical Economics, Public Policy, Politics, and Health

Behavioral economics has enjoyed an expanding influence on policy, offering novel solutions to problems, including many involving health, that traditional economics, with its assumption of rational choice, often fails to even acknowledge. I will review the rationale for and tools of behavioral economics, in the process discussing several of my own field experiments evaluating novel behavioral interventions in the domain of health. However, I will also raise a variety of issues that need to be confronted for behavioral economics to have a continuing, constructive, influence on policy.

We lack key evidence on the long-term consequences and potential unintended side-effects of behavioral interventions, and have not adequately thought through some of the ethical and practical considerations incumbent in many behaviorally informed policies. My broad conclusion will be that behavioral economics provides many useful tools and approaches, but can potentially play a negative role if it substitutes for, rather than complements, the types of policies favored by traditional economics.