The Behavioralist as Policy Designer: The Need to Test Multiple Treatments to Meet Multiple Targets

53 Pages Posted: 5 Dec 2016

See all articles by Robert W. Hahn

Robert W. Hahn

University of Oxford, Smith School; Georgetown University

Robert Metcalfe

University of Chicago - Becker Friedman Institute for Economics

David Novgorodsky

University of Chicago

Michael Price

Georgia State University - Department of Economics

Date Written: December 2016

Abstract

We explore Tinbergen’s fundamental insight that policymakers need at least as many policy instruments as targets. We extend this idea using a large natural field experiment in water resource management. We use social comparisons and loss-framed messages to help achieve two goals of our partner utility: getting consumers to purchase drought-resistant plants and reducing water use. Our results show that seemingly related behavioral instruments can affect different household decisions. By themselves, social comparisons and loss framing have no significant impact on the number of rebate requests; when combined, however, they lead to a 36% increase in requests. Only loss framing leads to a significant increase in the purchase of drought-resistant plants, and only the social comparison reduces water consumption. These results highlight the importance of testing different combinations of instruments, particularly when policymakers have multiple goals and the relationship between instruments and goals is uncertain.

Suggested Citation

Hahn, Robert W. and Metcalfe, Robert and Novgorodsky, David and Price, Michael, The Behavioralist as Policy Designer: The Need to Test Multiple Treatments to Meet Multiple Targets (December 2016). NBER Working Paper No. w22886, Available at SSRN: https://ssrn.com/abstract=2880325

Robert W. Hahn (Contact Author)

University of Oxford, Smith School ( email )

Oxford
United Kingdom

Georgetown University

Georgetown Center for Business and Public Policy
Washington, DC 20057
United States

Robert Metcalfe

University of Chicago - Becker Friedman Institute for Economics ( email )

Chicago, IL 60637
United States

David Novgorodsky

University of Chicago

Michael Price

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

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