Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

Are Policy Nudges Cost Effective?

by March 29, 2024
March 29, 2024
Are Policy Nudges Cost Effective?

Jeffrey Miron and Jacob Winter

An important strand of economic analysis suggests that nudges — non‐​coercive policies like providing relevant information or adjusting defaults — can significantly change economic behavior. This contrasts with traditional regulation and taxation, which are coercive in the sense of changing the prices or costs faced by economic agents.

According to proponents, nudges should be relatively acceptable to libertarians, precisely because they are non‐ or at least less coercive.

A key question, however, is whether nudges achieve their goals, and at what cost. On that score, the evidence is mixed. 

As one example, recent research (Cato Research Brief no. 374) conducted an experiment that encouraged customers to audit their water use (with the goal of reducing greenhouse gas emissions). The study concluded that audits reduce water use, but the reductions in emissions were small, so the program was not cost effective. Other research (Cato Research Brief no. 373) suggests that text messages to encourage a switch from coal to electric heating caused less rather than more use of electricity. New York City has mandated since 2008 that fast food restaurants display calorie information on menus; research has found no evidence that this policy has influenced calorie consumption or the frequency of visiting fast food restaurants.

To be sure, nudges sometimes work. Research has shown that take‐​up of retirement plans increases when employees are enrolled by default, even when opting out is trivial.

Overall, however, using nudges is harder than it looks. Meaningfully changing behavior (via taxation, regulation, mandates, or prohibitions) will likely generate unintended consequences. The research above “nudges” back against the claim that nudges can achieve substantial benefits at minimal cost by avoiding coercion.

This article appeared on Substack on March 28, 2024.

0
FacebookTwitterGoogle +Pinterest
previous post
The Evolution of Machine Learning Development: Trends, Challenges, and Opportunities
next post
Friday Feature: Eyes and Brain STEM Center

You may also like

Why Do States Protect Car Dealers?

March 29, 2025

Not Just Any Fiscal Commission Will Resolve America’s...

October 17, 2023

“We Should Be Pro-Market and Pro-Business”—New Book Excerpt

May 19, 2025

“Where the Writ of the Courts Does Not...

April 15, 2025

My Thoughts on Letters in Black and White

May 25, 2023

The Crypto Tax Rules Proposed by Senators Lummis...

July 28, 2023

Is China a Threat to the Fed? A...

August 15, 2022

A Reality Check on US Industrial Policy and...

June 14, 2024

Four Things the Senate Can Do to Improve...

May 22, 2025

Congressional Oversight: Document Demands Edition

June 8, 2023

Why Do States Protect Car Dealers?

March 29, 2025

Not Just Any Fiscal Commission Will Resolve America’s...

October 17, 2023

“We Should Be Pro-Market and Pro-Business”—New Book Excerpt

May 19, 2025

“Where the Writ of the Courts Does Not...

April 15, 2025

My Thoughts on Letters in Black and White

May 25, 2023

The Crypto Tax Rules Proposed by Senators Lummis...

July 28, 2023

Is China a Threat to the Fed? A...

August 15, 2022

A Reality Check on US Industrial Policy and...

June 14, 2024

Four Things the Senate Can Do to Improve...

May 22, 2025

Congressional Oversight: Document Demands Edition

June 8, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Don’t Overlook This Lagging Industry; I Believe It’s Set To Explode!

      July 6, 2025
    • Iran still wants a nuclear weapon despite ‘serious damage’ from US, Israeli strikes: expert warns

      July 6, 2025
    • Democrats project doom and gloom, not celebration, with July 4 messages

      July 5, 2025
    • Xi Jinping’s surprise no-show at BRICS Summit fuels speculation about China’s global standing

      July 5, 2025
    • Tesla sees UK sales rebound in June as EV market accelerates

      July 5, 2025
    • Hived raises $42m to roll out electric delivery fleet across southern England

      July 5, 2025

    Categories

    • Business (8,397)
    • Investing (2,102)
    • Politics (15,948)
    • Stocks (3,191)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved