Economics is the study of human behavior and decision-making. In classical economics, economic agents are assumed to be rational and behave in accordance with “utility maximization.” However, the behavior of real-world agents (also called human beings) frequently does not conform to the expectations of rationality: our decisions are influenced by biases, imperfect attention spans, and emotions.
To study human behavior in the real world, it is key to understand the psychology behind human behavior. Accordingly, behavioral economics blends insights from economics and psychology to study how people behave and make decisions.
Behavioral economics-inspired improvements to program delivery have gained popularity with governments across the world. Behavioral insights teams and their equivalents are now active in the United States, the United Kingdom, and Australia, among other countries.
This issue brief introduces the application of behavioral insights to the design and delivery of programs spanning human services and other policy areas. It also gives examples of successful interventions, summarizes IMPAQ’s projects in the area, and points to future trends in the field.