Using behavioral economics for poverty

I came across this very useful paper on applying the learnings of BE for reducing poverty. It is great to see BE principles being used widely

The paper shows how simple and less costly ideas can lead to more financial inclusion and improving poor participation in social programs.

They have some simple ideas like it isnt enough to ask people to go to a bank and open a no frills account but also give people a proper map with direction to show the location of the bank. Similarly make government transfers go automatically to a bank account (the default should be bank), etc.

For increasing participation in various government programs use simple forms, make it costlier to delay joining of these programs etc.

The best part about all these ideas is that it is pretty low cost and involves very little changes in the actual program.

3 Responses to “Using behavioral economics for poverty”

  1. Using behavioral economics to improve regulation « Mostly Economics Says:

    […] are being applied in macroeconomics and other policy issues (for instance see this on poverty and monetary […]

  2. Importance of social issues in financial inclusion « Mostly Economics Says:

    […] have written a lot about behavioral finance and even pointed a paper which looks at using BF to enhance financial […]

  3. Raghuram Rajan Committee on Financial Sector reforms « Mostly Economics Says:

    […] time. Many a time using BF/BE we realize the solution could be more simpler. I had mentioned about this paper where some ideas have been […]

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