behavioral economics and asset building - neighborhood partnerships' re:conference 2014
TRANSCRIPT
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#ReConf2014 | NeighborhoodPartnerships.org
RE:AlignBehavioral Economics
And Assets
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1) Our environment has a large, yet unrecognized effect on our behavior
2) Our intuitions about what drives our behavior are flawed
3) Emotions play a large role in our decision making
- Dan Ariely
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A healthy community begins at home. REACH provides quality, affordable housing and
opportunities for individuals, families and communities to thrive.
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Financial education classesIndividual financial coachingMatched-savings accounts
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nudge verb \ˈnəj\
: to touch or push gently
: to push gently with your elbow in order
to get someone’s attention
: to encourage someone to do something
Merriam-webster.com
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Boost self-control or activate behavior
Self-imposed or externally-imposed
Mindful or mindless Encourage or discourage
Nudging options
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Encourage mindfulness
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Create environmental cues
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Activate helpful mental accounting
Mvelopes.com, Smartypig.com
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Boost self-control
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Map program process
“I want to buy a house”
Finds out about program
Enrolls in financial ed
Completes financial ed
Coaching, credit-building,
planning
Fills out IDA application
Opens IDA account
Saves money, earns match
Buys a home
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Identify bottlenecks
“I want to buy a house”
Finds out about program
Signs up for info session
Attends info session, enrolls in financial ed
Financial ed, coaching, planning
Fills out IDA application
Opens IDA account
Saves money, earns match
Buys a home
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Simplify and/or nudge
“I want to buy a house”
Finds out about program
Signs up for info session
Attends info session, enrolls in financial ed
Financial ed, coaching, planning
Fills out IDA application
Opens IDA account
Saves money, earns match
Buys a home
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Encourage throughsocial proof
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More social proof…
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What’s next?From opt-in … … to active choice?
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• Founded in 1975 as the first domestic violence shelter in the West
• Bradley Angle serves survivors of all genders, offering emergency shelter and community based services
• The Economic Empowerment Program started in 2009 to respond to demand for services that addressed safety and finances simultaneously
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Choice Overload
• When faced with so many options, we often chose wrong
• Chocolate or vanilla versus
• Chocolate, vanilla, strawberry, mint chip, peanut butter, cheesecake, blueberry,
• Practice example: Days for making deposits
• Matched savings account offerings
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Limited Attention
• Limited attention can interact with choice overload. Attention is finite and we all love to “multitask.”
• With limited attention a cost-benefits analysis becomes too hard and we “just pick one.”
• Practice example: Car shopping
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Procrastination
• No explanation need!
• Practice example: Making activities “one-sitting”
• Setting artificial due dates
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Loss Aversion
• The joy of winning $20 is less than the pain of losing $20. Loss hurt us more than we feel the joys of wins.
• Practice example: Missed deposit letters
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Let’s Practice!
• Get into groups and discuss one way you can address a behavior change tenant at work or at home.
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#ReConf2014 | NeighborhoodPartnerships.org
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