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Behavioral Insights in Infrastructure Sectors: A Survey

George Joseph, Sophie Charlotte Emi Ayling, Pepita Miquel-Florensa, Hernan Bejarano () and Alejandra Quevedo Cardona

No 9704, Policy Research Working Paper Series from The World Bank

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 self-control, 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: Hydrology; Sanitary Environmental Engineering; Water Supply and Sanitation Economics; Town Water Supply and Sanitation; Small Private Water Supply Providers; Engineering; Sanitation and Sewerage; Water and Human Health; Health and Sanitation; Environmental Engineering; Energy and Mining; Energy and Environment; Energy Demand; Private Sector Economics (search for similar items in EconPapers)
Date: 2021-06-21
New Economics Papers: this item is included in nep-cbe, nep-env and nep-reg
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