Friday, October 2, 2015

I'm From the Government and I'm Here to Manipulate You

The White House has apparently discovered behavioral economics.  When Tyler Cowen linked to this a few days ago, I did wonder if it was really a link to The Onion, but it seems not.  Consider, for example, Binyamin Appelbaum's piece in a recent New York Times.  There are some interesting bits in the NYT article: note for example the observation that having companies make enrolment in retirement savings plan the default option increased the number of workers who enrolled but might have reduced the amounts some people saves.  However, there's no indication in the NYT article as to whether this takes account of how much people were, and continued to be, saving in other forms.

In a lot of ways the most interesting part of the article is the paragraph dealing with an experiment which tested out eight different versions of an e-mail encouraging members of the military to enrol in a retirement savings plan.  Seems the most effective version combined step-by-step instructions on how to do it with an example showing how regular small monthly payments could add up over time.

Is that anything other than saying that it'd be a good thing if government forms were written in Plain English?