What Is The Behavioural Insights Team In Behavioral Economics?

The Behavioural Insights Team (BIT), often referred to as the “Nudge Unit,” is a social purpose organization that applies behavioral science and psychology to create evidence-based policy interventions. It was initially established in 2010 within the UK government as a part of the Cabinet Office to improve public policy outcomes by understanding and influencing human behavior. In 2014, it became a separate social purpose company, jointly owned by the UK government, Nesta (an innovation foundation), and its employees.

The BIT uses concepts from behavioral economics, psychology, and other social sciences to design and test policy interventions in various domains, such as health, education, crime, energy conservation, and taxation. Their work often involves running randomized controlled trials (RCTs) to evaluate the effectiveness of these interventions, enabling evidence-based decision-making in public policy.

The team is known for its focus on “nudge” techniques, which involve subtle changes to the environment or the way information is presented to influence people’s behavior without restricting their choices. This approach is based on the idea that individuals often do not behave rationally and can be influenced by cognitive biases and heuristics.

Over the years, the Behavioural Insights Team has grown its international presence and now operates in multiple countries, including the United States, Canada, Australia, and New Zealand.

Lack of Efficacy of Nudges

The Behavioural Insights Team (North America) is one of the two teams whose results have brought the real world efficacy of behavioral economics nudges into question. The largest study of real world nudges to date used data from The Behavioral Insights Team and The Office of Evaluation Sciences. The study showed that their nudge interventions had an average absolute impact of 1.4%. This is much lower than what the behavioral economics literature would predict (8.7%). In other words: nudges are 1/6th as impactful as would be expected from the academic literature.

The results of the Behavioral Insights Teams’ interventions raises questions about the real-world effectiveness of behavioral economics.

Related Behavioral Economics Terms