Applying Insights from Behavioral Economics to Policy Design

Brigitte Madrian

No 20318, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The premise of this article is that an understanding of psychology and other social science disciplines can inform the effectiveness of the economic tools traditionally deployed in carrying out the functions of government, which include remedying market failures, redistributing income, and collecting tax revenue. An understanding of psychology can also lead to the development of different policy tools that better motivate desired behavior change or that are more cost-effective than traditional policy tools. The article outlines a framework for thinking about the psychology of behavior change in the context of market failures. It then describes the research on the effects of a variety of interventions rooted in an understanding of psychology that have policy-relevant applications. The article concludes by discussing how an understanding of psychology can also inform the use and design of traditional policy tools for behavior change, such as financial incentives.

JEL-codes: D03 D04 H2 H3 (search for similar items in EconPapers)
Date: 2014-07
New Economics Papers: this item is included in nep-evo
Note: AG CH DEV ED EEE EH LE LS PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (104)

Published as Brigitte C. Madrian, 2014. "Applying Insights from Behavioral Economics to Policy Design," Annual Review of Economics, Annual Reviews, Annual Reviews, vol. 6(1), pages 663-688, 08.

Downloads: (external link)
http://www.nber.org/papers/w20318.pdf (application/pdf)

Related works:
Journal Article: Applying Insights from Behavioral Economics to Policy Design (2014)
Working Paper: Applying Insights from Behavioral Economics to Policy Design (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:20318

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w20318

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().