Project: SAVEty Net: How BIT Ventures Can Help UK Customers Build Emergency Savings Funds
Client: Behavioural Insights Team (BIT)
Student Team: Liu, M., Maza, A., Milkowska, M., Perry, E., Rafiq, S., and Teti, K. (2016-2017)
Description: Within the past few years, policymakers have placed increased attention on the importance of “rainy day savings” to provide cushion for unexpected expenses. The average cost of these unexpected expenses is £1,545 – a significant amount of money considering that more than half of UK adults have less than £1,000 in savings, including a quarter who have none. The students were tasked with creating a digital solution to help young, low-income individuals increase their rainy day savings.
Based on behavioral insights into spending habits, the student team created “SAVEty Net,” a mobile application to help low-income UK customers build emergency savings funds. The mobile app encompassed a wide variety of behavioral interventions, including anchoring (e.g. goal of saving £1000), social norms and peer comparison (e.g. designed a function to compare savings with friends), and inertia and default effect (e.g. setting up automatic transfers). They designed a randomized controlled trial to help BIT isolate the app’s most effective features and decide which to include in the final product in order to promote savings behavior.
Project: The Role of Parents in Improving Participation Rates in University for Disadvantaged Students
Client: Widening Participation Team at King’s College London (KCLWP)
Student Team: Frey, E., Swamy, D., Taggart, J., Trout, M., and Zhang W. (2016-2017)
Description: Widening Participation Teams were established at universities across the UK in 2011, tasked with coordinating and delivering efforts to encourage applications from underrepresented populations. Parental aspirations play a significant role in a child’s decision to apply to university, and in low-income parents, only 53% of parents want or aspire for their children to apply to university. The student team set out with the goal of designing interventions that would increase parental engagement in their children’s path to university.
They designed behavioral interventions aimed at increasing parental aspirations, as well as increase belief in their child’s abilities, and these included a soft commitment device in the form of a contract between the school and the parent, along with the use of regular school reports which acted as a communication nudge to remind parents about their commitment. By measuring parental aspirations over time via surveys, the effectiveness of this intervention could be tested and then implemented across schools, with the expectation that parents who are committed to helping their child and are regularly reminded about their child’s progress will have higher aspirations for their child to attend university, and this in turn will increase the number of applications from lower-income students.
Project: Moving Gender Diversity Forward
Client: Department for Transport (DfT)
Student Team: Estrada, R., Leduc, A., Messer, J., Pookote, K., & Thakur, D. (2016-2017)
Description: Gender diversity in the workplace has been shown to improve performance and effectiveness of teams. The DfT has committed to increasing gender diversity in male-dominated roles, but despite their efforts, only 2% of the total applicants for two typically male-dominated DfT roles were female. The students were asked to design a nudge that would increase the number of female applicants for these two male-dominated DfT roles.
The students identified a number of behavioral interventions aimed at increasing female applicants in the job advertisement/attraction stage of the hiring process, e.g. including language to emphasize flexibility in the position (shown to increase the number of female applicants, and the inclusion of a female point of contact in the advertisement. They proposed an RCT designed to identify which interventions would be most effective at increasing female applicants for typically male-dominant roles.
Project: Saving For the First Home: A Report for the Nationaal Instituut voor Budgetvoorlichting (Nibud)
Student Team: Arora, A., Branch, K., de Vor, P., Hoffman, B., Martin, T., Meeren, G., & Trebo, T. (2015-2016)
Description: Homeownership is a prominent societal value within the Netherlands. Historically, Dutch banks would lend at loan-to-value (LTV) ratios up to 120% of the value of the home, but new regulations following the 2008 economic crisis make it necessary to save money in order to pay the costs of the mortgage and, ideally, some amount of down-payment. Nibud tasked the students with identifying an intervention to tackle the issue that first-time homebuyers (typically young people) might not have the knowledge or skillset to save enough to secure a mortgage.
The students identified inconsistent savings behavior as the main obstacle facing first-time homebuyers, and pointed out several biases at each step of the decision-making process that might obstruct savings behavior. They proposed Spaarhuis, a separate savings account which could be offered by commercial banks to help young people save for their first home. By allocating a predefined goal-account and minimizing the effort with creating an account, this would minimize the cognitive effort associated with saving. The students proposed a scalable RCT designed to show the effectiveness of Spaarhuis by comparing treatment groups using an easily implemented online platform.