In the past several days, there have been two pieces from the Fairfax economics team paraphrasing some very thin economic papers which are deemed to been informed by behavioural economics.
The first piece was by Ross Gittins who told us if the tax office changes the way it expresses its letters of demand to non-payers, then rates of compliance lift. Gosh, the insights – make it short, keep it simple, express it clearly, use statistics to which the receiver will relate, hint at a sense of local obligation.
And to to think we needed paper after paper in behavioural economics to realise all this. My suggestion is – just ask the advertising/marketing gurus and they would have told us all this years ago.
And then there was a piece by Peter Martin telling us that people are more likely to be buy convertible cars in the warmer months. I guess that news will really shock the car dealers.
And wait for this – the weather affects our mood and propensity to buy things.
I am in the school of wondering what really is the contribution of behavioural economics. And if the person on the street suffers from bounded rationality, etc., surely this applies to the bureaucrats who are trying to push us around and save us from our poor decision-making.
I am however intrigrued by the possible correlation between weather and responses to happiness/wellbeing surveys. If it is true that one’s sense of wellbeing is influenced by what the weather is at the time the question is asked, there may in fact be a serious inherent flaw in the surveys and all the analysis undertaken on the results.
I’m expecting a lot of sore heads with the upcoming heatwave, although we are in Queensland where it is 30 degrees pretty much every day. Someone should say a prayer of thanks to all those goldplated poles and wires as the demand for electricity soars!