17-10-04 SmarEST Taxation · 06/10/17 1 iNudgeyou THE APPLIED BEHAVIOURAL SCIENCE GROUP twitter: @peguha Nudging Taxation Tax morale and the value of data iNudgeyou THE APPLIED BEHAVIOURAL

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iNudgeyou THE APPLIED BEHAVIOURAL SCIENCE GROUP

www.inudgeyou.com twitter: @peguha

Nudging TaxationTaxmoraleandthevalueofdata

iNudgeyou THE APPLIED BEHAVIOURAL SCIENCE GROUP

Pelle Guldborg Hansen, Behavioural Scientist, Ph.D. / CBIT, Roskilde University Director of ISSP – The Initiative for Science, Society & Policy Chairman of The Danish Nudge Network CE of INUDGEYOU – The Applied Behavioural Science Group www.inudgeyou.com twitter: @peguha

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Vegetarian vs. Non-vegetarian buffet at conference setting

Group 1: At the conference a non-vegetarian buffet will be served for lunch. Mark if you would like to have a vegetarian dish prepared for you.

Group 2: At the conference a vegetarian buffet will be served for lunch. Mark if you would like to have a non-vegetarian dish prepared for you.

98%

13%2%

87%

0%

20%

40%

60%

80%

100%

120%

Ikke-vegeteriskdefault(n=56) Vegetariskdefault(n=52)

Ikke-vegetarisk

Vegetarisk

Non-vegetariandef.

Vegetariandef.

Non-vegetarian

Vegetarian

Nudge: Improving Decisions About Health, Wealth, and Happiness

iNudgeyou©2017

Thaler,R.&Sunstein,C.(2009)Nudge:ImprovingDecisionsaboutHealth,Wealth,andHappiness,RevisedandExpandedEdiQon,NewYork:PenguinBooks

A nudge is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives.!!

- Thaler & Sunstein 2008, 6!

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A nudge is a function of any attempt at influencing people’s judgment, choice or behaviour in a predictable way, that is (1) made possible because of cognitive limitations, biases, routines, and habits in individual and social decision-making posing barriers for people to perform rationally in their own self-declared interests, and which (2) works by making use of those limitations, biases, routines, and habits as integral parts of such attempts. Thus a nudge amongst other things works independently of: (i) forbidding or adding any rationally relevant choice options, (ii) changing incentives, whether regarded in terms of time, trouble, social sanctions, economic and so forth, or (iii) the provision of factual information and rational argumentation.

Hansen, PG (2016) The Definition of Nudge and Libertarian Paternalism: Does the hand fit the glove? The European Journal of Risk Regulation

Nudge – a theoretical definition

”Any intentional aspect of a choice architecture that should not influence behaviour in principle…, but does in practice.”

Hansen, PG (2016) The Definition of Nudge and Libertarian Paternalism: Does the hand fit the glove? The European Journal of Risk Regulation

Nudge – a practical definition

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Hansen, PG (2017) What is Nudging? Handbook of Behavioural Change and Public Policy, Edward Elgar

Nudging – A Science

1.  The systematic use of evidence-based behavioural insights

2.  Dual process cognitive theory

3.  The use of scientific methods for effect-evaluation

Behavioural economics

Cognitive psychology

’Nudging’

Social psychology

Dolan,Paul,Hallsworth,Michael,Halpern,David,King,DominicandVlaev,Ivo(2010)MINDSPACE:influencingbehaviourforpublicpolicy.InsQtuteofGovernment,London,UK.

An Overview of Nudging Practices

Serviceetal(2012)EAST:Foursimplewaystoapplybehaviouralinsights,BehaviouralInsightsTeam

Ly,Kim,NinaMazar,MinZhaoogDilipSoman(2013).APracIIoner’sGuidetoNudging,Toronto:UniversityofToronto,RotmanSchoolofManagement.

Hansen,PG(2017)BASIC–APracIIoner’sMethodologytoapplyingBehaviouralInsightsinPublicPolicyMaking,forthcoming

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ImplementaQon

Monitoring

Maintenance

KnowledgeDisseminaQonTarget

behaviour%

Analysis SoluQon IntervenQon ConQnuaQon

BehaviouralreducQon

Hotspot-analysis

Processchart

Behaviour

BehaviouralPadern

Who What

Currentbehaviour%

AdenQon

BeliefformaQon

DeterminaQonDefaultsSaliencePrompts…

MessengerAnchoringDescripQvenorms…

LossAversionHyperb.discounQngSocialnorms…

Impl.intenQonsSocialcommitmentSubsQtuQon…

sample

treatment Control

measurement

IntervenQon&experimental

design

Proto-testoftest

R

Ethicalscreening

When

Choice

iNudgeyou©2017

Case: Companies filing for Tax 2016 Partners: Danish Taxation Authorities & iNudgeyou År: 2016

iNudgeyou©2017

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iNudgeyou©2017

Behaviour B

A

S

I

C

•  AllDanishcompanieshavetofileVAT-andTax

•  In2015approximatelyonlyone-thirdofDanishcompanies(35%)filedtheirTaxonQme.

•  LackofconformityresultsinunnecessarycostsandadministraQonforTheDanishTaxaQonAuthoriQesaswellascompanies.

iNudgeyou©2017

Analysis B

A

S

I

C

•  Since2008TAXhasmadeiteasierforciQzenstofiletheirtaxbypre-fillingtheindividualtaxreportaswellasmadethisapre-setchoiceunlessyouacQvelymakechanges.

•  Start-upsandsmallcompaniesmightnotbeawarethatallDanishcompaniessQllhavetoacQvelyfiletheirVAT-andTaxes.

•  InaddiQon,companiesmightnotbeparQcularlymoQvatedormightstallintheprocessoffilingtheirtax.

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B

A

S

I

C

iNudgeyou©2017

Solution B

A

S

I

C

•  Alongseriesofstudieshaveshownthatasimplereminder,e.g.withinHealth,ohenmakesabigdifferenceinconformitytorulesandagreements,seee.g.(Hasvold&Wodon2011;Stubbsetal2012).

•  AsuggesQonthatane-mailreminder(e-boks)shouldsenttoallcompaniesthathaven’tfiledtheirtaxesoneweekpriortodeadline.

•  IntegraQonofloss-aversioninthemailthatemphasisesthepotenQallossbynotfilingtaxonQme–aninformaQonthatpriorto2015hadonlyfiguredaspartofthebodyoftheleder.

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iNudgeyou©2017

Intervention

Sample n = (119.367)

Control:

Recipients in 2015 who did not get a reminder e-mail

Loss Aversion (LA)

Treatment + Attention

n = (39.787)

Randomisation n = (119.367)

LA Treatment +

Attention + Ego-consistency

(EC) n = (39.790)

LA Treatment +

Attention + EC

+ instructions n = (39.790)

65%74% 74% 74%

00%10%20%30%40%50%60%70%80%

Control(2015) LossAversion(LA) LA+EgoConsistency(EC)

LA+EC+STEPS+adenQon

Continuation B

A

S

I

C

Li#eratureHasvold,P.,&Wodon,R.(2011).UseoftelephoneandSMSreminderstoimproveadendanceathospitalappointments:asystemaQcreview.JournalofTelemedicineandTelecare,17,s.358-364.Stubbs,N.,Geraci,S.,Stephenson,P.,Jones,D.,&Sanders,S.(92012).MethodstoReduceOutpaQentNon-adendance.AmericanJournalofMedicalScience344(3),s.211-219.

•  TAXadoptsthecombinaQonofe-mailremindersandlossaversionaseffecQvestrategiesingeqngcompaniestofiletheirtaxonQme

•  Theteamresponsibleforthe2016trialwillmonitor2017intervenQonanddevelopitfurther

•  ResultsaretobedistributedthroughouttheDanishandEuropeanNudgingNetworks

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ImplementaQon

Monitoring

Maintenance


behaviour%


BehaviouralreducQon

Hotspot-analysis

Processchart

Behaviour

BehaviouralPadern

Who What

Currentbehaviour%

AdenQon

BeliefformaQon





sample

treatment Control

measurement


design

Proto-testoftest

R

Ethicalscreening

When

Choice

iNudgeyou©2017

Targetbehaviour%

CurrentBehaviour%

Context

Bias Nudge

B

A

S

I

C

Behavioural Mapping

iNudgeyou©2017

STARTHERE

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”Mandtal”

n=Ca.460.000*

Assessedforeligibility(n=ca.400.000*)Servicemeddelelseomatservicebreveterklar=nukanfolkbegyndeatindberedeselvangivelse.SendesumiddelbartviaE-boksharDorteHolmoplyst

Excluded(n=ca.60.000)

Harselvtastetitastselv(n=60.000)

UlQmoapril 23.juni*(-8dage)


Harselvangivet(n=250.000)

Assessedforeligibility(n=ca.50.000–60.000)RykkermailQldemsomendnuikkeharselvangivet.SendesogsåQlE-boks,ifølgeDorteHolm.

1.Juli Fristforatselvangiveforde460.000omtaltevirksomheder


Harselvangivet(n=100.000)

7.Julica.

Assessedforeligibility(n=ca.150.000*)Erindringsmail.SendesQldemsomendnuikkeharselvangivet.Deterdemail,dererarbejdetpåsidsteår.SendesogsåQlE-boks,ifølgeDorteHolm


?????(n=28.000)Medioaugust Assessedforeligibility(n=ca.22.000)

Densåkaldtemangellistetrækkes.Dvs.enlisteoverdem,somstadigikkeharselvangivet.DenerdenlistevilavervorestaksaQonerudfra.

1.Ophørte

UlQmoaugust Assessedforeligibility(n=ca.19.000)FysiskerykkerbrevesendesQludvalgtesegmenter

2.AkQer

3.Erhvervs-ejendom.

4.Nystartede

5.Kombiaf1-4 6. 7. 8 9

Vierfærdigemedattaksere–ogharforindkomståret2015takseretknap15.500

UlQmofebruar ”porQon”somnåratselvangiveindenvifårlavetentaksaQonQldem.Vibegynderattaksereprimoseptemberogerfærdigeca.ulQmofebruar


?????(n=3.000)

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ImplementaQon

Monitoring

Maintenance


behaviour%


BehaviouralreducQon

Hotspot-analysis

Processchart

Behaviour

BehaviouralPadern

Who What

Currentbehaviour%

AdenQon

BeliefformaQon





sample

treatment Control

measurement


design

Proto-testoftest

R

Ethicalscreening

When

Choice

iNudgeyou©2017

BASIC© by

iNudgeyou

Defaults

Salience

Prompts

Status quo bias Symmetric choice default

Opt- in opt-out defaults Default suggestions (B)

Default as reference (C)

Loss aversion

Diminishing marginal utility

Reference point

Hyperbolic discounting

Scarcity / urgency

Focusing illusion

Ordering effect

Mental models

Action direction

Action choreography

Mental accounting Psychological friction

Implementation intentions Chunking

Substitution

Tunneling

Distractors

Limited attention

Focusing effects

Diagnostic domain

Solution domain

Complex causal relations

Information overload Need to

act/react

Need to compare

Strategic

thinking

Goal maintenanc

e

Goal balancing

Intuitive coding

Directed information

Trust signals

Framing of motives

Framing of prospects

Identity drivers

Cognitive resources

Stimulus control

Planning tools

Feedback Contrasting principle Natural salience

Personalisation Learned salience

Pattern salience Strategic salience

Forced choice Suggested choice Perceived relevance

WYSIATI Planning error

Search heuristics

Instructions

Simplification Anchoring

Descriptive norms Status cascades

Authority

Priming of motives

Affect

Sunk cost effect

Risk aversion for gains

Risk attraction for losses

Ego-consistency

Social conformity

Reciprocity

Fairness

Social commitment Don’t break the chain

Social comparison Success feedback

Routine feedback

Goal-setting Visualisation Abstraction

Out of sight, out of mind Pre-emptive strike

Small steps Cognitive fatigue

Cognitive bandwidth

© iNudgeyou, 2017

iNudgeyou Den Danske Nudge Enhed

Documents

17-10-04 SmarEST Taxation · 06/10/17 1 iNudgeyou THE APPLIED BEHAVIOURAL SCIENCE GROUP twitter: @peguha Nudging Taxation Tax morale and the value of data iNudgeyou THE APPLIED BEHAVIOURAL