Megastudies improve the impact of applied behavioural science.

Policy-makers are increasingly turning to behavioural science for insights about how to improve citizens' decisions and outcomes1. Typically, different scientists test different intervention ideas in different samples using different outcomes over different time intervals2. The lack of comparability of such individual investigations limits their potential to inform policy. Here, to address this limitation and accelerate the pace of discovery, we introduce the megastudy-a massive field experiment in which the effects of many different interventions are compared in the same population on the same objectively measured outcome for the same duration. In a megastudy targeting physical exercise among 61,293 members of an American fitness chain, 30 scientists from 15 different US universities worked in small independent teams to design a total of 54 different four-week digital programmes (or interventions) encouraging exercise. We show that 45% of these interventions significantly increased weekly gym visits by 9% to 27%; the top-performing intervention offered microrewards for returning to the gym after a missed workout. Only 8% of interventions induced behaviour change that was significant and measurable after the four-week intervention. Conditioning on the 45% of interventions that increased exercise during the intervention, we detected carry-over effects that were proportionally similar to those measured in previous research3-6. Forecasts by impartial judges failed to predict which interventions would be most effective, underscoring the value of testing many ideas at once and, therefore, the potential for megastudies to improve the evidentiary value of behavioural science.

Evaluation of Combined Financial Incentives and Deposit Contract Intervention for Smoking Cessation: A Randomized Controlled Trial.

INTRODUCTION: We evaluate whether a combination of financial incentives and deposit contracts improves cessation rates among low- to moderate-income smokers. METHODS: We randomly assigned 311 smokers covered by Medicaid at 12 health clinics in Connecticut to usual care or one of the three treatment arms. Each treatment arm received financial incentives for two months and either (i) nothing further ("incentives only"), (ii) the option to start a deposit contract with incentive earnings after the incentives ended ("commitment"), or (iii) the option to precommit any earned incentives into a deposit contract starting after the incentives ended ("precommitment"). Smoking cessation was confirmed biochemically at two, six, and twelve months. RESULTS: At two, six, and twelve months after baseline, our estimated treatment effects on cessation are positive but imprecise, with confidence intervals containing effect sizes estimated by prior studies of financial incentives alone and deposit contracts alone. At two months, the odds ratio for quitting was 1.4 in the incentive-only condition (95% CI: 0.5 to 3.5), 2.0 for incentives followed by commitment (95% CI: 0.6 to 6.1), and 1.9 for incentives and precommitment (95% CI: 0.7 to 5.3). CONCLUSIONS: A combined incentive and deposit contract program for Medicaid enrollees, with incentives offering up to $300 for smoking cessation and use of support services, produced a positive but imprecisely estimated effect on biochemically verified cessation relative to usual care and with no detectable difference in cessation rates between the different treatment arms.

SAVINGS BY AND FOR THE POOR: A RESEARCH REVIEW AND AGENDA.

The poor can and do save, but often use formal or informal instruments that have high risk, high cost, and limited functionality. This could lead to undersaving compared to a world without market or behavioral frictions. Undersaving can have important welfare consequences: variable consumption, low resilience to shocks, and foregone profitable investments. We lay out five sets of constraints that may hinder the adoption and effective usage of savings products and services by the poor: transaction costs, lack of trust and regulatory barriers, information and knowledge gaps, social constraints, and behavioral biases. We discuss each in theory, and then summarize related empirical evidence, with a focus on recent field experiments. We then put forward key open areas for research and practice. JEL Codes: D12, D91, G21, O16.

Microcredit in theory and practice: using randomized credit scoring for impact evaluation.

Microcredit institutions spend billions of dollars fighting poverty by making small loans primarily to female entrepreneurs. Proponents argue that microcredit mitigates market failures, spurs micro-enterprise growth, and boosts borrowers' well-being. We tested these hypotheses with the use of an innovative, replicable experimental design that randomly assigned individual liability microloans (of $225 on average) to 1601 individuals in the Philippines through credit scoring. After 11 to 22 months, we found evidence consistent with unmet demand at the current price (a roughly 60% annualized interest rate): Net borrowing increased in the treatment group relative to controls. However, the number of business activities and employees in the treatment group decreased relative to controls, and subjective well-being declined slightly. We also found little evidence that treatment effects were more pronounced for women. However, we did find that microloans increase ability to cope with risk, strengthen community ties, and increase access to informal credit. Thus, microcredit here may work, but through channels different from those often hypothesized by its proponents.

Being surveyed can change later behavior and related parameter estimates.

Does completing a household survey change the later behavior of those surveyed? In three field studies of health and two of microlending, we randomly assigned subjects to be surveyed about health and/or household finances and then measured subsequent use of a related product with data that does not rely on subjects' self-reports. In the three health experiments, we find that being surveyed increases use of water treatment products and take-up of medical insurance. Frequent surveys on reported diarrhea also led to biased estimates of the impact of improved source water quality. In two microlending studies, we do not find an effect of being surveyed on borrowing behavior. The results suggest that limited attention could play an important but context-dependent role in consumer choice, with the implication that researchers should reconsider whether, how, and how much to survey their subjects.

Small individual loans and mental health: a randomized controlled trial among South African adults.

BACKGROUND: In the developing world, access to small, individual loans has been variously hailed as a poverty-alleviation tool - in the context of "microcredit" - but has also been criticized as "usury" and harmful to vulnerable borrowers. Prior studies have assessed effects of access to credit on traditional economic outcomes for poor borrowers, but effects on mental health have been largely ignored. METHODS: Applicants who had previously been rejected (n = 257) for a loan (200% annual percentage rate - APR) from a lender in South Africa were randomly assigned to a "second-look" that encouraged loan officers to approve their applications. This randomized encouragement resulted in 53% of applicants receiving a loan they otherwise would not have received. All subjects were assessed 6-12 months later with questions about demographics, socio-economic status, and two indicators of mental health: the Center for Epidemiologic Studies - Depression Scale (CES-D) and Cohen's Perceived Stress scale. Intent-to-treat analyses were calculated using multinomial probit regressions. RESULTS: Randomization into receiving a "second look" for access to credit increased perceived stress in the combined sample of women and men; the findings were stronger among men. Credit access was associated with reduced depressive symptoms in men, but not women. CONCLUSION: Our findings suggest that a mechanism used to reduce the economic stress of extremely poor individuals can have mixed effects on their experiences of psychological stress and depressive symptomatology. Our data support the notion that mental health should be included as a measure of success (or failure) when examining potential tools for poverty alleviation. Further longitudinal research is needed in South Africa and other settings to understand how borrowing at high interest rates affects gender roles and daily life activities. CCT: ISRCTN 10734925.