Be gentle when nudging European consumers

    Justin Saddlemyer
    Justin Saddlemyer

    Using behavioral insights to ‘nudge’ behavior is a trendy topic, but how do European consumers feel about it?

    Schipol Airport had a problem: activity at the urinals was inaccurate to say the least. The solution? Fly-shaped decals applied to the center of every urinal. The initiative was estimated to reduce ‘spillage’ by as much as 80%. This example of a “nudge”, the act of engineering environments to guide behavior in a predictable way, is featured near the beginning of the influential book “Nudge: Improving Decisions about Health, Wealth, and Happiness” by Richard Thaler and Cass Sunstein (2008). In it, the authors defend the use of behavioral economics and psychology to influence people’s behavior in instances where campaigning, invasive regulations, and other measures may not be so effective. In the example of the airport, the understanding that attention and target practice might be strong motivators for behavior was successfully used to steer people in a desirable direction.

    Although nudging may be used for such purposes as marketing and sales, often it is discussed in domains of consumer welfare, such as improving eating behavior or safety. For example, placing healthy foods such as fruits and vegetables at the grocery store at eye level (i.e. easier to spot and grasp), and unhealthy foods at higher or lower shelves (thus out of vision and harder to reach) could be considered a nudge. But this begs the question, how ‘light’ should the nudge be? At what point are you no longer nudging consumers, but instead shoving them? Thaler and Sunstein, the authors of Nudge, argue that one of the primary goals of nudging should be to maintain freedom: individuals should be able to ignore the nudge with minimal effort. However, there is another way to discuss the merits of using behavioral insights to guide behavior, and that is to ask the people who are being nudged.

    Although a number of studies have surveyed consumers on their attitudes towards nudging, most of these have been conducted in North America (e.g. Felsen, Castelo, & Reiner; 2013; Jung & Mellers, 2016), and less is known about how Europeans feel about such techniques. However, a paper recently featured in the Journal of Judgement and Decision-Making features the results of a large international survey centered in Europe. In particular, the authors polled 1000-2000 citizens per country, sampling Denmark, France, Germany, Hungary, Italy, and The UK. The survey was simple, and required participants to express whether they approved or disapproved of a series of 15 nudges that are already in practice or are being considered to be put into practice. The nudges ranged from health-centered measures (to control issues such as obesity and salt-intake) to environmental concerns (such as green energy providers). The full list from the paper is listed below.

    1. The federal government requires calorie labels at chain restaurants (such as McDonald’s and Burger King).

    2. The federal government requires a “traffic lights” system for food, by which healthy foods would be sold with a small green label, unhealthy foods with a small red label, and foods that are neither especially healthy nor especially unhealthy with a small yellow label.

    3. The federal government encourages (without requiring) electricity providers to adopt a system in which consumers would be automatically enrolled in a “green” (environmentally friendly) energy supplier, but could opt out if they wished.

    4. A state law requiring people to say, when they obtain their drivers’ license, whether they want to be organ donors.

    5. A state law requires all large grocery stores to place their most healthy foods in a prominent, visible location.

    6. To reduce deaths and injuries associated with distracted driving, the national government adopts a public education campaign, consisting of vivid and sometimes graphic stories and images, designed to discourage people from texting, emailing, or talking on their cellphones while driving.

    7. To reduce childhood obesity, the national government adopts a public education campaign, consisting of information that parents can use to make healthier choices for their children.

    8. The federal government requires movie theaters to provide subliminal advertisements (that is, advertisements that go by so quickly that people are not consciously aware of them) designed to discourage people from smoking and overeating.

    9. The federal government requires airlines to charge people, with their airline tickets, a specific amount to offset their carbon emissions (about 10 EUR per ticket); under the program, people can opt out of the payment if they explicitly say that they do not want to pay it.

    10. The federal government requires labels on products that have unusually high levels of salt, as in, “This product has been found to contain unusually high levels of salt, which may be harmful to your health”.

    11. The federal government assumes, on tax returns, that people want to donate 50 EUR to the Red Cross (or to another good cause) subject to opt out if people explicitly say that they do not want to make that donation.

    12. The federal government requires movie theaters to run public education messages designed to discourage people from smoking and overeating.

    13. The federal government requires large electricity providers to adopt a system in which consumers would be automatically enrolled in a “green” (environmentally friendly) energy supplier, but could opt out if they wished.

    14. To halt the rising obesity problem, the federal government requires large supermarket chains to keep cashier areas free of sweets.

    15. For reasons of public health and climate protection, the federal government requires canteens in public institutions (schools, public administrations and similar) to have one meat-free day per week.

    Overall, most of the respondents were positive towards the proposed measures. But receptiveness varied according to how intrusive the measures were. Informational nudges, such as campaigns and label information were the most approved items, garnering approximately 77-78% approval across the countries. Default systems, whereby consumers are automatically enrolled in a program (such as automatically donating 50 euros on their tax return to a charitable cause or automatic enrollment in organ donation systems) were less approved, and only received an average level of approval of 54.8% across the countries. The least approved option was the one suggesting subliminal messaging, which only received 42.5% percent support. In essence, as nudges became more invasive, or could result in financial penalties (i.e. the Red Cross initiative), people became less favorable.

    Perhaps unsurprisingly, there was also some divergence amongst the countries in their responses. In particular, the UK and Italy were the most favorable towards the tested nudges. On the other end of the spectrum, Hungary and Denmark were the least favorable. Even amongst the incredibly popular calorie label nudge, for which the other countries averaged approximately 85% support, Hungary and Denmark expressed only 73.8 and 63.4 percent approval rating (respectively). For Hungary, these lower levels were attributed to a history of communism and a high corruption index; for Denmark the authors were not so clear on the findings. One suggestion however was a recent decline in trust in the Danish government.

    The overall takeaway? People are, at least in many European countries, open to light nudges. When these measures do not directly tap into people’s bank accounts, and are relatively easy to disregard, people seem to favor them. Even more active nudges, such as placing healthy foods in more visible areas, garnered a high level of support (well above 50% in every country except Denmark, who expressed only 48% support). An interesting future question that this research has yet to fully answer is how the domain can affect attitudes. This survey focused mostly upon food, energy, and environmental concerns. However, as discussed in the book Nudge, behavioral economics and psychology can be applied to additional domains, and in particular financial behavior.

    For instance, Thaler and Sunstein cite work that looked at how automatic enrollment in a retirement savings program increased participation (i.e. changing the system from an ‘opt-in’ to an ‘opt-out’ program; Madrian & Shea, 2001). Given that these types of nudges appear to gain some level of support in the US (54% of respondents from an American survey supported such a measure; Jung & Mellers, 2016), it would be interesting to look at whether these results generalize to a European sample.

    SOURCES:

    Felsen, G., Castelo, N., & Reiner, P. B. (2013). Decisional enhancement and autonomy: public attitudes towards overt and covert nudges. Judgment and Decision Making, 8(3), 202.

    Jung, J. Y., & Mellers, B. A. (2016). American attitudes toward nudges. Judgment and Decision Making, 11(1), 62-74.

    Leonard, T. C. (2008). Richard H. Thaler, Cass R. Sunstein, Nudge: Improving decisions about health, wealth, and happiness. Constitutional Political Economy, 19(4), 356-360.

    Madrian, B. C., & Shea, D. F. (2001). The power of suggestion: Inertia in 401 (k) participation and savings behavior. The Quarterly Journal of Economics, 116(4), 1149-1187.

    Reisch, L. A., & Sunstein, C. R. (2016). Do Europeans like nudges?. Chicago

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