The Success Story of the UK Behavioral Insights Team
In 2010, the first unit dedicated to applying behavioral economics in public policy was established by the UK government under Prime Minister David Cameron. Led by psychologist Dr. David Halpern, the team drew heavily on the expertise of Dr. Richard Thaler, author of the influential 2008 book Nudge, which served as the intellectual foundation for the unit.
The unit’s main goal was to “empower people to make better choices for themselves” and to make public services more cost-effective and easier for citizens, by understanding human behavior in relation to decisions and public services.
The First Meeting
In his book Inside the Nudge Unit, David Halpern describes the details of the first meeting held with UK government decision-makers to present the work of the Behavioral Insights Team. Halpern was given only ten minutes on the meeting agenda to present the results—at a time when there was skepticism about whether behavioral economics would be effective or whether the unit was simply a temporary idea destined to fail.
Halpern began by sharing the results of the team’s first experiment in collaboration with the tax authority. They sent letters reminding individuals to pay their taxes, using different versions of the message. One version included a simple phrase: “Most people pay their taxes on time.”
This was to test whether changing the wording would alter people’s behavior. The results showed a 5% increase in tax payments, generating significant additional revenue for the government.
Another experiment aimed to encourage quicker payment of vehicle taxes by adding a photo of the vehicle’s owner—captured through road cameras—to the violation notice. This change raised the payment rate from 40% to 49%. At the end of the presentation, the attendees were impressed by the results, which strengthened confidence in using behavioral economics to introduce small changes that could have a large financial and economic impact.
Developing a Methodology
The team developed a methodology based on four main principles, the first being the simplification of information to capture people’s attention. Examples include:
- Redesigning prescription forms to help doctors prescribe correct medication dosages and reduce medical errors.
- Adding the recipient’s first name to public SMS messages to increase attention—this significantly boosted charitable donations in one experiment.
- Showing households their monthly energy use compared to that of their neighbors, encouraging reduced consumption through social comparison.
Transformation into a Global Organization
Due to its success, the government unit was transformed in 2014 into a limited company owned jointly by the UK government, the innovation foundation Nesta, and members of the unit itself. Today, it provides behavioral economics services around the world.
