What is "Behavioural Insights"?

"Behavioural insights" (BI) draws on research from behavioural economics, psychology, and neuroscience to understand how humans behave and make decisions in everyday life. By better understanding how people respond to different contexts and incentives, decision-makers can design and implement better policies and services.

BI provides a useful approach to policymaking, as the process of facilitating behaviour change requires a deep understanding of the practical and structural barriers that people face. Traditionally, many policies and programs have been developed with an underpinning in conventional economics, which assumes that people are rational agents always seeking to "self-maximize" in their decisions. The reality, as behavioural economists and cognitive psychologists have discovered, is that people tend to make decisions that depart from rationality in often predictable ways. BI seeks to use the learnings from academia, and there is a growing network of practitioners applying BI in the private and public sectors around the world.

One of the strengths of BI is its experimental approach to policy and service design. Randomised controlled trials (RCTs), used wherever possible in BI, are a powerful tool to help policymakers and practitioners decide which of several policies is the most cost effective, and which interventions are not as effective as expected. This approach enables us to adapt our policies so that they steadily improve in quality and effectiveness.

BI in Australia

In November 2012, the New South Wales Government entered into a partnership with the United Kingdom Cabinet Office to support the application of behavioural insights to policies and programs in NSW.

NSW is the first state in Australia to create a centrally staffed and funded BI unit, and BI is providing a new way of looking at existing challenges.

The federal government and several state governments in Australia have been increasing their BI expertise and implementing behavioural trials, contributing to the growing pool of knowledge and research demonstrating proven policy outcomes.