Source: Economic Survey 2018-19
Policy for Real People, Not Robots: Leveraging the Behavioral Economics of “Nudge”
- Decisions by real people deviate from impractical robots theorized in classical economics.
- Behavioral economics provides insights to ‘nudge’ people towards desirable behavior.
- Key principles of behavioral economics:
- Emphasizing the beneficial social norm.
- Changing the default option.
- Repeated reinforcements.
- Using insights from behavioral economics to create an aspirational agenda for social change:
- From ‘Beti Baco Beti Padhao’ to ‘BADLAV’ (Beti Aapki Dhan Lakshmi Aur Vijay Lakshmi).
- From ‘Swachh Bharat’ to ‘Sundar Bharat’.
- From ‘Give it up” for the LPG subsidy to ‘Think about the Subsidy’.
- From ‘Tax evasion’ to ‘Tax compliance’