Creating products that nudge people toward more sustainable lifestyles has been something of a trend lately. When these initiatives succeed, they often rely on tools from behavioural economics, championed by Nobel laureate Daniel Kahneman.
But what if, instead of using subtle cues to encourage change, we brute-forced the issue by simply paying people to do the right thing?
That’s exactly what’s being explored in a pan-European research project and already implemented at scale in the Netherlands, where people are paid 20 cents per kilometre for ditching their car in favour of their bike.
It’s interesting because it challenges the assumption that states can only influence behaviour through disincentives. Most of us have grown accustomed to exorbitant taxes on tobacco and alcohol, for example. But it’s harder to imagine being paid to quit smoking or stay sober. Yet using taxpayers’ money this way could make economic sense, given the collective costs incurred by habits like smoking or excessive drinking.
Will we start seeing more examples of citizens being paid for doing the right thing? The recent incentives to encourage people to get their COVID shots suggest this might be a growing trend. I find that pretty interesting.