Nudging towards a better future- Stories and few suggestions.

Nudges are effective public policy instruments at the disposal of  policy makers to promote  socially desirable behaviors amongst citizens. The concept of Nudging was popularized by Nobel laureate Richard Thaler. According to him, policies based on nudges are ‘Libertarian paternalism’ where the state is nudging citizens towards a path which are beneficial to themselves, without being seen as authoritarian. He believes that, in a liberal democracy, people should have the freedom to do 'wrong' things, but State is morally responsible to nudge it's citizens to act responsibly.

As a public policy, we too have some examples in this category even though we had not adopted it widely to the extent possible. Here we discuss such few examples of those kinds, which are already put in place by the government in last couple of years.

a)      Electricity bills-

Have we noticed that our electricity bill contain data on our past 12 months consumption in  graphical formats? This is to make us understand the pattern of consumption and to see whether we make any conscious efforts towards reducing it.

Comparing our own past usages will likely to induce us to make an effort to reduce next month's usage. It will also provide us a benchmark from where we can relate our progress towards  reducing electricity consumption. We human beings cant spend our time on thinking and analyzing on everything. Often, we make our judgement using few thump rules and in this case, past usages in a graphical format gives us an excellent anchor. 

b)     Power of  default option - railway ticket booking experiment-

Have anybody noticed that IRCTC have changed default option for concessional rates for senior citizens. Earlier, senior citizens were getting concessional tickets automatically. However, now, such concessions can be availed only if the applicant changes the default option to that effect.

According to this report, nearly 90 lakh senior citizens have foregone their concessional prices and paid in full. I believe, many people would have gone for the default option without having to exercise the concessional ticket price option. Anyways, railways made substantial money just by having intelligently crafted default option. Because of the inherent status quo bias in us, we often go for default choices despite being our best choices lies elsewhere. 

Note- Recently, in the last few days, Railways have done away with this default option and gone to active choice of either of the options. 

c)      Ranking and rating-

Perhaps the mother of all nudges in the recent past is ranking the states under the Ease of doing business parameters. This brought a sense of competition amongst the state governments on reforms they had to undertake for easing the compliance, speeding up the approvals etc. Those found on the top were always praised and those on the bottom were shamed. .  No state wants to be at the bottom and hence it is seen as a race to the top.


Ranking and ratings are powerful policy instruments to nudge people to act in certain ways. Everybody wants to be favorably recognized and social shaming is always unwelcome.  

Now, let us discuss some suggested Nudges that can bring some good changes.

1)      Want to promote practice of yoga?  Dedicated spaces is the key

 Many find it difficult to practice Yoga at their home as they don’t have a dedicated space for it. As a way out, let us think of allowing extra FSI to builders, free of cost, for having a separate yoga room in apartments. This yoga room would be of a specified size which will discourage converting that in to an another bed room. Builders can make money out of it and the residents can have good yoga training in that room.  No money is spend by the government.

Why we need it ? –Now, having a Yoga room, there is an enabling environment in which he can translate his intention (of doing Yoga) to an actionable one. Besides, Sunk cost phenomenon would play here as people believe that they had already paid for the ‘Yoga room’ which can’t be used for any other purpose. So, by doing Yoga, he will be getting 'returns' and thereby doing justice to the money he already spend.

2)      Want to promote Organ donation-?  Make it far more easier

Many of us are willing to donate our eyes and organs once we die. But most of us don’t know where to go, do necessary consent and register. Even if we know, we often procrastinate. 

A simple way out. While issuing Driving licence or Passport, obtain consent to that effect and mention in it.  This will help our near relatives to know that we had already consented for organ donation and once we dies, the same information can be passed to the appropriate authorities.

Why we need it ? – As human being, we may not translate all our good intentions in to actions unless we are given a conducive and enabling environment to perform that act. We often misbehave, particularly when our choices and it's consequences are separated by a longer time-frame. A little nudge can be very fruitful in these type of cases.   

3)      Want to promote honesty?  ‘Declare it at the top’

It has been empirically proven that when an individual do self reporting, he is more likely to be honest when he has been made to sign the Honesty declaration at the top, rather than at the bottom.

Why we need it ? - This is because, when he declares and signs by putting his name on it, there is an element of self reflection in it and thereby he is linking his identity with certain moral values. So, he is more likely to be honest. Again, if such honesty declaration is at the end when he has already performed that act, his ‘morality upsurge’( which is resultant of his self declaration) , is less likely have an impact. This is because, he is less likely to revisit the act which he had already performed.    

4)      For Swach Bharat enthusiasts –

If you can keep the boundary walls, graffiti free and make it freshly painted, people are less likely to throw garbage near to it. If the place looks nice and well maintained, there would be a feeling that somebody has a control over it and hence people are less likely to violate the norms and rules prevailing there.  

Most social habits are contagious. We learn from others and we like to confirm to it. Many prey to collective conservatism, even if there is no particular benefit from it. If people feel that 'significant others' are not littering, then they will also adopt that behavior. We all have a powerful status quo bias within us, that tempts us to maintain a clean area clean and not to alter its status quo.

5)      Railway passes and SMS s-

Millions use Mumbai railway local passes and most of the passes are issued for 3 months. And 3 month is really a long period to keep an expiry date to remember. People often forget its renewal and travel with expired passes and once caught, are treated as ticket-less passenger and fined.

Railway can easily send an SMS  alerting about the expiry date of such passes a couple of days before. This will alert the people and is thus is a gentle warning that Railway is keen on renewal of his ticket on time.  This can be implemented by collecting mobile number at the time of issuance of passes and making some slight tweaks to its ticketing software.

Why we need it ?– Humans make predictable errors and if we can anticipate these errors, we can device policies that can reduce it. Again,as human beings, we have self control issues particularly when frequency of decisions are very less ( in this case , it is once in 3 months). A gentle nudge by making it easier to remember the expiry date can helpful in this case.

This is certainly not exhaustive but an indicative list of options available to the policy makers for bringing certain positive social behavior. Government of the day should leverage its understandings on human behavior patterns and have to integrate these aspects in its policy formulations. 

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