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Don’t exhort, don’t fine

india Updated: Feb 17, 2012 21:53 IST
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Governments typically use two tools to encourage citizens to engage in civic behaviour like paying their taxes, driving safely or recycling their garbage: exhortation and fines. These efforts are often ineffective. So it might be a good time to expand the government’s repertory to include positive reinforcement. Rewarding good behavior can work. As every successful parent learns, one way to encourage good behaviour, from room-cleaning to tooth-brushing, is to make it fun. Not surprisingly, the same principle applies to adults.

In this spirit, the Swedish division of Volkswagen has sponsored an initiative they call ‘The Fun Theory’. Their first project involved getting people to use a set of stairs rather than the escalator that ran alongside it. By transforming the stairs into a piano-style keyboard such that walking on the steps produced notes, they made using the stairs fun, and they found that stair use increased by 66%. Next, the Fun Theory sponsored a contest to generate other ideas. The winning entry suggested offering both positive and negative reinforcement to encourage safe driving. Specifically, a camera would measure the speed of passing cars. Speeders would be issued fines but some of the fine would be distributed via lottery to drivers who were observed obeying the speed limit.

This example illustrates an important behavioral point: many people love lotteries. Some governments are using this insight. New Taipei City in Taiwan recently initiated a lottery as an inducement for dog owners. Owners who deposited dog waste into a special depository were made eligible for a lottery to win gold ingots, thus literally turning dog waste into gold. The top prize was worth about $2,000. The city reports that it halved the fecal pollution in its streets during the initiative.

In mainland China, lotteries are used for a different purpose: tax compliance. As in many parts of the world, China has a thriving cash economy, and it is common for small businesses like restaurants to evade paying sales tax. To combat this behaviour, the government printed special receipts that are supposed to be given to restaurant customers when they pay. Cleverly, each receipt includes a scratch-off lottery ticket, giving customers an incentive to ask for a receipt.

Lotteries are just one way to provide positive reinforcement. Their power comes from the fact that the chance of winning the prize is overvalued. Of course you can simply pay people for doing the right thing, but if the payment is small, it could well backfire. (If the total dog-prize money had been divided up evenly among all those who turned in their baggies, I estimate that the price paid would have been about 25 cents per bag. Would anyone bother for that?)

An alternative to lotteries is a frequent-flyer-type reward programme, where the points can be redeemed for something fun. A free goodie can be a better inducement than cash since it offers that rarest of commodities, a guilt-free pleasure. This sort of reward system has been successfully used in England to encourage recycling. In Windsor and Maidenhead, citizens could sign up for a rewards programme in which they earned points depending on the weight of the material they recycled. The points were good for discounts at merchants in the area. Recycling increased by 35%. The moral here is simple. If governments want to encourage good citizenship, they should try making the desired behaviour more fun.

(Richard H. Thaler is a professor of economics and behavioral science at the University of Chicago. He is the co-author of Nudge: Improving Decisions About Health, Wealth, and Happiness)

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