mindy hernandez, innovator in residence, cfed senior researcher, ideas42
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Behavioral Economics 201: Applying Behavioral Research to Asset Building Initiatives: Lessons From a Year of Experimentation. Mindy Hernandez, Innovator in Residence, CFED Senior Researcher, ideas42. Embarrassment. $. Cost. Hassle. Demand. Demand for New Savings Product, SuperSave. - PowerPoint PPT PresentationTRANSCRIPT
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Mindy Hernandez, Innovator in Residence, CFED
Senior Researcher, ideas42
CFED Assests Learning Conference September 23, 2010
Behavioral Economics 201:
Applying Behavioral Research to Asset Building Initiatives:
Lessons From a Year of Experimentation
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Demand
Cost Hassle
Embarrassment$
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Demand
Hassle
Lots of hassle
Pretty easy
Demand for New Savings Product, SuperSave
50 500
“psychological subsidy”
From a behavioral perspective
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The CFED Innovation Year Connect with great partners
Target the highest value challenges
Understand the context
Design and implement an intervention
Evaluate and learn
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Process: Understanding the Context
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A Note on Methodology
Outcome
Evaluation
Quasi-
experimental
Rigor
Confidence
Experimental
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Increasing preparedness at tax time for self-employed clients: Campaign for Working Families (CWF) & Foundation Communities Austin, TX (FC)
Increasing take-up of savings products and public benefits at tax time: CWF
Increasing the use of direct deposit and savings accounts: Bank On DC & the Summer Youth Employment Program
2009-2010 Innovation Projects
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PlusConsumer Credit Counseling Services
of the Delaware Valley (CCCSDV)
Increasing debt counseling attendance
Increasing response rates to surveys
These projects were supported by the Annie E. Casey Foundation
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Emerging Lessons: What Seems to Make a
Difference
Simplification is key
Well designed reminders help
Behaviorally-informed incentives can make a difference
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Simplify
CCCSDV
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CCCSDV - Debt Counseling
Increased financial stability
Recruit clientsClients come for debt counseling
Complex form
Clients receive financial counseling
Simplify Form
60%
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CCCSDVOriginal debtCounseling
Letter
Plus 5 pages Of financialworksheets
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CCCSDVRevised debtCounseling
Letter
Zero worksheets
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Results
n= 584
38% 43% 37%
24% 20%
QE Design
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Well Designed Reminders Help
CWF Preparedness & Foundation Communities
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CWF: Preparedness at Tax Time
Increased tax refunds
Encourage/educate clients to prepare Clients prepare
Hassle, stressful, time-intensive
Make a planSend reminders
Clients havepaperwork needed
for tax day
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Does Tax Preparedness Matter?
n= 259
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Irene Skricki1234 Maine StBaltimore, MD
Irene Skricki1234 Maine StBaltimore, MD
Complete excel sheet!
Find train receipts!
Call Comcast for copy of internet bill
Irene Skricki
April1, 2010April 5,2010
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Control Treatment
(mean) refund_less_eitc (mean) refund_less_eitcrefund_hi/refund_lo
Preparation of Filers
Results
n = 41
Tax refunds Without EITC for SETI Clients at CWF - 2010
$241
$1,837
+$1,596
Experimental Design
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Impact DiscussionThe findings are potentially very powerful. This
was a small sample; more research needs to be done.
In statistical analyses, the two groups seem to be random and similar. There are no statistically significant differences between the two groups.
In adjusted analyses, we find the treatment seemed to have a significant effect.
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Behavioral IdeasReminders can act as channel factors, nudging
us toward our desired intention.
• Consistency: We like to appear consistent to ourselves and others
• Public accountability: We are more likely to follow through when we have told others of our intentions
• Planning (Implementation intentions): Detailing the steps needed to implement our goals helps
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Foundation CommunitiesBusiness Class Enrollment
Increased businesscapacity & income
Advertise ClassClients enroll in
class
Depletion, Overload
Clientsattend class
Send reminders
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Do Reminders Matter?
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Impact DiscussionLetters did seem to significantly increase interest and
enrollment.
Additional postcards didn’t seem to make a difference.
Letters were especially helpful for those who did not receive a a refund: tax filers who received a negative refund and a letter were significantly more to express interest or attend a class compared to similar filers who did not receive the letter.
Experimental Design
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Behaviorally Wise Incentives
CCCSDV
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CCCSDV- Survey Response
Improved DMP Program
Send surveys- incentives
People complete surveys
Hassle, time-intensive
Send pre-incentives
CCCSDV able tolearn from clients
88%
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Why Pre-incentives Work
Survey completio
n
Survey completio
n
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ResultsSurvey Response Rates at CCCSDV
n =968
Experimental Design
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Implementation Lessons Learned
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Expectations. Sometimes we see big, exciting effects but most interventions have modest results- even these can be valuable.
Evaluation. There can be tension between learning & impact
Staff. Program staff are the single most important element to implementing a successful intervention.
Time. Even simple interventions require significant program staff time- in both design and implementation.
Implementation. Pay attention to the right intervention point: Build on current processes. Details Matter.
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From Theory to Application
Early challenges
to traditional economic
Model(Early 1900s)
Breakthrough behavioral research
(Kahneman and TverskyProspect Theory, 1979)
Large-scale applied Behavioral pilots
Applied in the field with great success(Save More
Tomorrow; 2001)
Today:Testing
in the field
Administration for Children & Families BIAS
Project2010
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Case Study: Foundation Communities
Linda Paulson, Tax Services Coordinator
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What I Learned as a Practitioner Research Partner
There is a new way to look at data
Allocate enough staff (not just volunteer) time. Make sure you have the staff capacity and data resources dedicated to the project.
Find easy ways to collect data that can be built into current data collection systems (tax wise or survey monkey)
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Next Steps for Foundation Communities
Look into cost effective ways to send reminders (email and text)
Use preparedness data to target unprepared clients and offer one-on-one coaching for preparedness
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Case Study Campaign for Working FamiliesA program partner of the Urban Affairs Coalition in
Philadelphia, PA
Megan Kiesel, Director of Impact and Outreach
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What I Learned as a Practitioner Research Partner
Think about overall program design
Think about implementation (not just what services you’re offering but how are you offering those services?)
Think about how to make small changes in current processes
Find a research partner- speed dating at the ALC is a great opportunity! CFED is also collecting names for the future.
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Next Steps for CWF
Continue partnering with researchers to conduct formal experiments with more intention and staff support
Continue to integrate behavioral changes into larger program design
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Final Thoughts: What Now?Create you own map: What are the key goals? Put yourself in
your clients’ context- where are the chutes? Potential ladders?
Read Nudge (Cass & Sunstein) and Influence (Cialdini)
Be realistic & prepare: Do you have the staff, data and time?
Connect with great research partners (CFED can help!)
Big picture: continue the conversation: how can we continue to connect great researchers to big problems and great practitioners?
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Learn more on the the blog:Cfed.org&Watch out for the white paper