13th annual Municipal Finance Conference


13th annual Municipal Finance Conference


This holiday season, nudge like the private sector taught you

This time of year, one can’t help but be amazed by the sheer psychological muscle the private sector flexes to shape our holiday purchasing. Take the new Walmart ad, which starts with kids holding up their favorite items from the store aisles, talking with boundless glee about the joy the gift will afford. The ad then shifts to asking children whether they’d rather have the toy for themselves or give it to someone whose family can’t afford gifts during the holidays. The kids’ smiles fall, their faces wrinkle up with deep thought, and then, in the adorable, heartfelt articulation unique to children, every child says they’d rather give the toy to someone in need. We are given a concrete, touching experience—and Walmart is cast in the role of a broker of goodness and generosity.

Of course, commercials are only the beginning. From Amazon emails recommending electronics based on our past decade’s worth of digital purchases, to offers of live chat support on every website, companies pull one behavioral lever after another to nudge us toward more holiday purchasing.

It’s also worth reflecting on what the private sector doesn’t do to get us to buy stuff. Apple, for instance, doesn’t try to persuade us that their processors are the best on the market by drowning us in the technical specifications of their products. Rather, they visually tell stories of people taking pictures both of their loved ones and of magical, potentially life-changing places. Jeep doesn’t try to convince us that we’ll save money each month by buying their more fuel-efficient SUV; they just associate their product with Star Wars, both a source of deep nostalgia and the hottest movie of the current decade.

Contrast this with how we tend to promote opportunities in education. When we want economically-disadvantaged families to attend elementary or secondary schools where their children are more likely to be successful, we send out packets emphasizing these schools’ superior test scores. When we encourage students from low-income backgrounds to apply to college, we highlight the lifetime earnings benefits associated with a postsecondary degree. In short, we message about the numbers, as if we were trying to influence the decisions of a large population of statisticians.

Sometimes these strategies work; recent evidence suggests, for instance, that school choice information with simple star ratings of school performance can lead parents of elementary school students to send their children to higher-quality middle schools. But other times emphasizing quantitative outcomes has little impact, or can lead to perplexing results. Giving low-income families semi-customized information about financial aid eligibility doesn’t lead to higher completion rates for the Free Application for Federal Student Aid (FAFSA). And in the same school choice study referenced above, sending the same information to rising high school students actually led to students attending substantially lower-quality schools. One reason for this result may be that students were anxious about attending the highest-performing schools.

This outcomes-focused approach to influencing decision-making in education overlooks at least a half century of research in marketing and consumer psychology about what’s most compelling to people. A few points you may glean from the above examples:

  • With very few exceptions, easy is better.
  • People like to see themselves positively.
  • The concrete and immediate are compelling.
  • New things are scary.
  • We like to do good for others.

These insights have important implications for how we think about nudging students and families to make more active and informed decisions about the educational opportunities they pursue:

  • Keep it simple. The education sector is fraught with confusing and complex processes that are required to take advantage of or maintain opportunities. A recent article highlighted, for instance, that many loan borrowers do not stay on income-based repayment plans simply because they do not complete a complicated income recertification process. Contrast this with the great lengths the private sector goes to make buying things as easy as possible (think of Amazon’s One-Click order button).  Wherever possible education organizations should simplify the processes that people need to complete in order to take advantage of or stay in programs.
  • Paint more compelling, concrete pictures. Improved test scores and long-run financial pay-offs are both abstractions that may not have much motivating value for students with fairly strong orientations toward the present. Much as advertisers rely much more heavily on imagery than text, efforts to communicate educational opportunities should more actively incorporate visual representations and student narratives to convey the appeal of new experiences—the dynamic energy of a master teacher’s classroom; the sense of community and belonging that can develop on a college campus.
  • Recognize and reinforce positive identities.  Particularly during the adolescent years, students’ identities are malleable—external cues about who they are can be powerful determinants of their behavior. Targeted advertisements take precisely this approach; research shows that consumers can internalize the identity presented to them in well-targeted ads. So, a charity might send you an ad suggesting you’re a generous person, on the basis of your giving last year. Because you want to embrace and continue in that identity, your likelihood to give this year goes up. Similarly, we need to look for opportunities to acknowledge that students’ positive behaviors and successes are part of their identities. Has a student been motivated enough to search a variety of colleges? Tell them that’s something that top students do. Not only will they be affirmed in the past behavior, they may behave consistently with these identities in other domains. 
  • Recognize students’ anxieties about novelty. It’s great to remove behavioral barriers to success, but our interventions often do not address the social anxieties that students may face as they pursue their goals. What if the experiences ahead of them are new? Will they fail? Fit in? Marketers have long recognized that consumers fear failure in the same way, and have invested in services intended to reduce that fear. For example, Apple’s “Genius Bar” both normalizes our need for help with our new devices and sets up an active learning environment, encouraging us to become as empowered as these helpful, hip individuals. Similarly, a suite of social psychological interventions takes a more active approach to mitigating underlying barriers; by teaching people about the malleability of intelligence and addressing anxieties they have about whether they belong in new educational environments, these strategies foster greater resilience and better position people to overcome new challenges as they arise.  
  • Be a source of good, not just a recipient. Retailers also recognize the power of allowing consumers to help one another: to be not only the recipients of good, but its source. In Warby Parker’s very successful “buy one, give one” promotion, consumers knew that for every pair of eyeglasses they purchased, one would be provided to a needy individual. In a similar way, we can explore ways that students who are succeeding can lend a hand to others—benefiting from the identity reinforcement, motivation, and social connection allowed by the experience.

None of this is to say that educational interventions should adopt all the tools in a marketer’s toolbox—creating Black Friday-style stampedes for financial aid or raising college prices just for the sake of giving “discounts” would likely lead to many undesirable outcomes. Still, if we can make educational programs and opportunities as exciting as the prospect of a Christmas morning stocking, we may unwrap a gift with impacts far beyond a single season—both for students and for society as a whole.