Applying Behavioral Economics to Public Policy in Canada

59 Pages Posted: 26 Sep 2016 Last revised: 30 Sep 2016

See all articles by Robert French

Robert French

University of Toronto

Philip Oreopoulos

University of Toronto - Department of Economics; National Bureau of Economic Research (NBER); Canadian Institute for Advanced Research (CIFAR)

Date Written: September 2016

Abstract

Behavioral economics incorporates ideas from Psychology, Sociology, and Neuroscience to better predict how individuals make long-term decisions. Often the ideas adopted include present or inattention bias, both potentially leading to sub-optimal outcomes. But these models also point to opportunities for effective, low-cost government policies that can have meaningful positive effects on people’s long-term well-being. The last decade has been marked by a growing interest from governments the world over in using behavioral economics to inform policy decisions. This is true of Canada as well. In this paper we discuss the increasingly important role behavioral economics plays in Canadian public policy. We first contextualize government policies that have incorporated insights from behavioral economics by outlining a collection of models of intertemporal choice. We then present examples of public policy initiatives that are based upon findings in the field, placing particular emphasis on Canadian initiatives. We also document future opportunities, challenges, and limitations.

Suggested Citation

French, Robert and Oreopoulos, Philip, Applying Behavioral Economics to Public Policy in Canada (September 2016). NBER Working Paper No. w22671. Available at SSRN: https://ssrn.com/abstract=2843384

Robert French (Contact Author)

University of Toronto ( email )

Toronto, Ontario M5S 3G8
Canada

Philip Oreopoulos

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S 3G7
Canada

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Canadian Institute for Advanced Research (CIFAR)

180 Dundas Street West, Suite 1400
Toronto, Ontario
Canada

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