Applications of Nudges: Health

After assessing how nudges can be used in the case study of retirement savings, we will now look at other applications, starting with health – how do we encourage people to live the healthiest lives possible without forcing any decisions upon them?

One way in which nudges can be used to improve general health is to encourage healthy eating. Often, when people are prompted with a question that seems to benefit them, they usually say yes. This was used in an old policy at McDonald’s where people were asked if they wanted to super-size their order – the benefit being they got more food – and most people answered yes. This is an example of where nudges are used negatively, as the consumers are nudged to eat more unhealthy food, which in the long term can cause problems such as obesity and other fat-related illnesses like cardiovascular disease. However, a separate study in a Chinese restaurant did the opposite – it asked customers if they wanted to downsize their order, and again the majority said yes. For the customers who did agree to this option, they ate 200 fewer calories on average, which can be extremely useful if it is applied across many restaurants for all meals. If an individual is eating 200 fewer calories on average per meal, the benefits to their health would be tremendous, and so applying this system on a large scale could reduce the so-called obesity epidemic that many developed nations are currently experiencing, reducing strain on the nation’s healthcare system and producing a more productive workforce that lives longer and can be active in the economy for a greater period of time.

Another application of nudges to improve health is to help people quit smoking. One such scenario where this occurred was with General Electric, a major multi-national engineering firm. The leaders at General Electric felt that the smoking habits of some of their employees were negatively impacting their productivity, and so they wanted to change this – to do so, they relied on the help of nudges. They set up a randomised controlled test (i.e. a field experiment) to assess the success of nudging if it were to be applied to everyone employed in the economy. The test involved offering workers in the treatment group $250 if they stopped smoking for six months and $400 if they were able to maintain this progress for a year. In the control group, the workers were offered no incentive to quit smoking. The researchers leading the experiment found that the treatment group had three times the success rate of the control group and that these results were maintained even after the 12-month period ended and the incentives were removed. Seeing this clear success of the nudge, General Electric went on to implement this scheme for its then 152,000 employees. This would not only reduce their costs for employee health insurance plans but would also increase productivity and lifespan, allowing them to work longer and remain active in the economy, so applying such a system to other firms across the country would boost economic growth while relieving strain on the health sector as they would have to deal with fewer cases of smoking-related diseases such as lung cancer. It is clear from these two examples how powerful nudges can be in improving general public health, which would go on to reduce stress on healthcare services and produce more productive workers who are active in the economy for longer, creating a variety of economic benefits in the long run.

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