July 18, 2013
Tax breaks for the healthy could change the way we livePosted in Behavioural Economics · 56 comments ·
Okay, hands up: whose family doesn’t have rows over loo seats, the state of the jacks and the men and boys in the family not being able to aim properly? Girls, tell me you haven’t been driven demented by your man and his inability to hit the target? And mothers of young sons: don’t tell me the ponds of pee around the base of the loo are not an almost daily chore! We have all been there.
Now can you imagine the hassle of running a gents public loo, let’s say in a football ground, large pub or an airport? With this in mind, one of the most innovative ideas I have ever seen was presented to me in a bar in Belgium many years ago when I was a student there. In the urinals, about halfway up the porcelain was a fly. At first, I thought it was a real fly, but it didn’t move. However, the static fly in the urinal did something weird to my behaviour.
At the sight of the fly in a urinal, something very odd happens in the behaviour of the average man. Instead of unfocused peeing, the static fly brings out the hunter in us.
The act of urinating suddenly becomes a duel, where all our concentration is centred on drenching the fly. For an instant we turn into a sharpshooting Shane Long in front of goal, deadly, precise, calm. One-nil to the boy, curtains for the fly.
Then, with the inner satisfaction of a job well done, we zip up, head out and the loo is infinitely cleaner, the cleaners’ job infinitely less unpleasant and the upkeep of the jacks generally better served. More importantly, the behaviour of men has changed in such as way as to make the man himself the instigator of this cleaner environment.
Years later, I read a fascinating book called ‘Nudge’, which explores the relatively new area of behavioural economics. The fly is cited in the first chapter and apparently it was an innovation first unveiled in Amsterdam’s Schiphol Airport in the 1980s. It was such a success in Holland, where cleaning bills fell, that the idea quickly spread to neighbouring Belgium and beyond.
This experiment tells us that we can change people’s behaviour for the greater good, even when that behaviour seems ingrained. This is hugely significant because if people’s behaviour can be changed, if we can be ‘nudged’ in certain directions by incentives, consider how many positive ramifications of changing our behaviour today might yield?
Sometimes it is easy to think of economics as being only about banks, interest rates and defaults, but economics can also be deployed in a variety of ways that may help us all by helping us help ourselves.
In the case of the fly in the urinal, the ultimate saving was in the cleaning bill and general state of public loos, but now consider the case of public health. Imagine the huge savings in the future if we changed people’s behaviour now, which could reduce dramatically the incidences of behaviour-related disease?
Let’s consider prostate cancer.
Prostate cancer rates in Ireland are the highest in Europe and amongst the highest in the world. One in eight men in Ireland will be diagnosed with prostate cancer in their lifetime; this is comparable to a woman’s risk of developing breast cancer, which is 1 in 9. In sorry contrast to breast cancer, where awareness has been heightened by brilliantly successful campaigns over recent years, prostate cancer is still rarely discussed in public.
That’s the bad news. The good news is that prostate cancer is over 90% curable – if detected and treated in its earliest stages.
Latest figures show that in 2010, 3,125 men were diagnosed with prostate cancer in Ireland, a small increase on 3,079 in 2009. Tragically, over 500 men die of prostate cancer in Ireland every year.
We know that men living in Western countries are more likely to get prostate cancer than men in south and east Asian countries. This may be because of our Western diet, which contains less fruit and vegetables than in other parts of the world and much more dairy, red meat, sugar and processed foods.
Doctors agree that eating a healthy, balanced diet with a wide variety of foods, including plenty of fruit and vegetables, may help to prevent prostate cancer. Like many cancers, those in the highest-risk categories are men whose fathers, brothers or uncles got prostate cancer. However, if weight, diet or booze increase the risk of getting prostate cancer, imagine if we could change behaviour today, to prevent diseases tomorrow? But we know from a variety of areas such as smoking or saving for a retirement decades ahead that we humans don’t care too much about the future because today it seems so far away. So we take risks.
If someone says to you, eat more fruit and veg, drink fewer pints and go for a decent walk everyday and you could reduce your risk of prostate cancer in the future, how many of us men would change our behaviour tomorrow?
But now imagine that we were incentivised to change our behaviour by something like a tax break for being healthy at 40, 50 and 60? This might sound radical but it’s no more radical than a tax increase at a certain random income figure so that earning a euro less than that figure saves you from the tax and earning a euro over that figure penalises you with the tax.
It is important to allow people to change their own behaviour, so you give people plenty of choice.
Indeed, there could be various gradients of incentives, allowing you to change behaviour gradually or rapidly or not at all.
In the years ahead, access to data and computer power to process this data will allow the Government to play with ideas like this, which could measure changed behaviour but would allow people to choose themselves if they want to avail of the incentives or not, without prejudice.
The emergence of behavioural economics will make all these ideas more and more normal in the years ahead and the emergence of big data will make these things more and more possible. Equally, the fly in the urinal shows that people can be ‘nudged’ to do the right thing for the benefit of themselves and others.
Behaviour can change and some changes could dramatically affect our health and the health budget. It may sound fantastical now, but it’s all out there. Welcome to a brave new world.