Summary and Quick Reference Guide

Dos and Don'ts: A Quick Reference Guide for Policy Analysts

Behaviour and Decision-Making

• Don't assume people will have perfect information - most decisions are made under uncertainty.
• Do consider the situation a person is in and the way the person is interpreting the situation - can you scaffold (guide or direct) people's choice to that preferred by policy by adjusting any environmental or institutional structures?
• Don't rely too heavily on beliefs - beliefs are not a reliable predictor of behaviour; and it is extremely difficult to decipher what someone else's beliefs are using only their behaviour as a cue.
• Do be careful when assessing the outcome of a decision - that a decision has a bad outcome for a person does not entail it was a bad decision or irrational (because decisions are made under uncertainty). That some people make mistakes, and that some decisions will be wrong, must be accepted as normal.

Motivations and Aspirations

• Don't assume that people will engage in a detailed or exhaustive search to get the optimal outcome - rather, people aim for threshold standards beyond which they don't keep searching.
• Do consider fairness, status, social norms and personal identity in motivating behaviour - policy should incorporate these factors, rather than focus solely on cost-benefit analysis or financial incentives, in order to achieve desired behavioural changes.
• Don't underestimate peer pressure - changing social norms are difficult but using people with certain influences can help.
• Do encourage greater personal involvement, rather than focusing solely on the provision of (often complex) information - people make better choices when they feel in control.

The Way People Understand the World

• Don't underestimate the power of emotions - emotions play a large part in people's perceptions of the likelihood of positive or negative events, especially if the events are linked to particularly frightening, happy or exciting outcomes or to things that a person has previously experienced.
• Do consider the impact of losses - people are generally loss averse. Loss of a given amount of money or resource will have greater value than gaining the same thing. People will take fewer risks that might result in losses than they would in order to achieve gains. This has important policy implications for instances, such as when assets are redistributed from one group to another.
• Do take account of habits - unconscious and ingrained habits can cause people to think that established ways of doing things are the most efficient, even where this is not the case. These perceptions can be challenged by bringing habits into people's conscious attention and through designing policy so that individuals can see greater incentives to adopt more efficient practices, instead of continuing with less efficient habits.
• Do consider how information is presented or framed - this can influence the way people use that information to make choices.