At first glance, pension contributions, tax payments and the accuracy with which men pee into a urinal would appear to have little in common. But, since the turn of the millennium, all three have been the subject of ‘nudge’ theory programmes to encourage better choices without the imposition of draconian rules.
Changing pension participation to opt out, rather than opt in, boosted private sector pension scheme membership from 47% in 2012 to 73% in 2020; informing late-paying taxpayers that their local peers were paying their taxes boosted HMRC’s receipts by 15 percentage points; and painting flies on the base of urinal bowls in Amsterdam’s Schipol Airport reduced ‘spillage’ by 50% as men paid more attention to their aim.
Given the low cost and political acceptability involved in achieving these dramatic improvements, it is not surprising that national and local authorities are looking to the insights of behavioural economics developed by Nobel Prize-winning economist, Richard Thaler, to ‘nudge’ people towards more sustainable modes of transport.
Without taking away the power to choose – private cars could still be sitting in driveways – nudges aim to influence choices towards greener travel that reduces pollution and, ideally, congestion.