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Behavioral Insights in Infrastructure Sectors: A Survey

George Joseph, Sophie Ayling, Pepita Miquel-Florensa, Hernán D. Bejarano and Alejandra Quevedo Cardona
Additional contact information
Sophie Ayling: World Bank
Pepita Miquel-Florensa: Toulouse School of Economics
Hernán D. Bejarano: CIDE
Alejandra Quevedo Cardona: (World Bank/Institut Barcelona d’Estudis Internacionals

No 119, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: In the past two decades, insights from behavioral sciences, particularly behavioral economics, have been widely applied in the design of social programs such as pensions, social security, and taxation. This paper provides a survey of the existing literature in economics on the application of behavioral insights to infrastructure sectors, focusing on water and energy. Various applications of behavioral insights in the literature are examined from the perspectives of the three main actors in the infrastructure sectors: policy makers, service providers, and consumers. Evidence is presented from the literature on how behavioral regularities, such as imperfect optimization, limited selfcontrol, and nonstandard preferences, affect the strategies, decisions, and actions of policy makers, service providers, and consumers, often leading to suboptimal outcomes for service investment, delivery, access, and use. The paper also highlights how behavioral interventions such as anchoring, framing, nonpecuniary incentives, and altering the choice architecture can lead to improvements in performance, adoption, consumption, and other outcomes of interest in the infrastructure sectors.

Keywords: Micro-based Behavioral Economics; Publicly Provided Goods, Water, Energy, Infrastructure, Development Planning and Policy (search for similar items in EconPapers)
JEL-codes: D9 H4 O21 Q4 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2022-02
New Economics Papers: this item is included in nep-cbe and nep-cwa
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