Description of Assignment: 

Design a behavioral economics response to one of the two problems outlined below. You can choose either option 1 (obesity) or option 2 (energy conversation)

Depth, breadth and “multiplexity” of the analysis and its stakeholders, will determine the quality of the journal.

Learning Outcome(s) Assessed: 

1,2,3,4,5 and 6

Length:

5-7 pages

Individual Assignment Options

Option 1

A recent report released by the Trust for America’s Health and the Robert Wood Johnson Foundation used population trends and other data to predict that half of U.S. adults will be obese by 2030 unless Americans change their ways. It is estimated that 35.7% of adults and 16.9% of children aged 2 to 19 are obese, as the Centers for Disease Control and Prevention (CDC) reported earlier this year. The CDC predicts that these numbers are going to increase and exceed 60 percent in the next few years. Obesity raises the risk of numerous diseases, from type-2 diabetes to endometrial cancer. This will impose a greater burden on healthcare systems and associated costs.  These projections supports a study published earlier this year in the American Journal of Preventive Medicine that found that by 2030, 42% of U.S. adults could be obese, adding $550 billion to healthcare costs over that period.

Trust for America’s Health sees an opportunity to change the growth in obese population with the right interventions. “We have learned that with a concerted effort you can change the culture of a community, including its level of physical activity, eating habits, what foods are offered in schools, and whether families eat together,” said Geoffrey Levi of George Washington University. In New York City, for instance, obesity for elementary and middle-school students dropped 5.5 percent from the 2006-07 school year to 2010-11, thanks mostly to healthier school lunches, public health experts said.

Source: Begley, S. (2012, Sep 18). Fat and getting fatter: U.S. obesity rates to soar by 2030. Reuters. Retrieved from http://www.reuters.com/article/2012/09/18/us-obesity-us-idUSBRE88H0RA20120918

Your task

Suppose you are appointed as a consultant to develop proposals for encouraging individuals or groups to make healthier choices.

Propose a specific intervention to encourage healthy behaviors which may lower the increasing obesity rate. You could choose to focus on the U.S., or even suggest a nudge in your home country. Please specify the target group and the behavior you want to change. For example, you can focus on reducing obesity among adolescent boys or old women. Likewise, you may reduce the obesity by increasing the level of physical activity or by consuming more vegetables and less saturated fat. Think about the decision process relevant to the target behavior and the factors might cause the problem and promote the desired behavioral change. Describe what behavioral principle you are using and how your solution intervenes the decision making process in a way to induce the desired behavior. Next, please design and describe an experiment which will be helpful in testing the effectiveness of your intervention.

Source: Prof. Dilip Soman, University of Toronto Rotman.

Option 2

News reports from almost any country in the world suggest that electricity consumption is rising and that the use of electricity is creating pressures on production facilities and straining grids.

A recent report on the energy consumptions of major buildings in Seoul, the capital city of the South Korea, showed that some universities and office towers were large energy-hungry buildings in Seoul. One university alone consumed 4,403 tons of oil equivalent (TOE) from 2011 to 2012. After experiencing an hours-long black out which affected approximately 820,000 households in 2011, the city government plans to actively deal with the problem. In June 2013, the city government and 34 major universities in the city agreed to implement programs to reduce the level of electricity consumption around campuses.

Many years ago, an article in the Toronto Star (August 13, 2004) entitled “Blackout no catalyst for conservation” noted that at the first anniversary of the famous 2003 power grid “blackout” triggered possibly by excessive electricity consumption, Canadians were using electricity at the same rate (if not higher) as before. The article notes that catastrophic failures like the blackout should have delivered an important message to consumers to conserve energy, yet it seems to have had no such effect.

Other articles have noted that despite the fact that energy efficient appliances save money in the long run, many households are averse to purchasing them. They also bemoan the fact that many households fail to turn off the air conditioning, lights or fans when they are not at home.

Your task

Suppose you are appointed as a consultant to develop proposals for helping any city or town in your country to conserve energy. In particular, provide suggestions how can we get households or offices to better regulate and curb consumption of electricity.

Propose a specific intervention to encourage behaviors which may reduce excessive electricity use. Please specify the target behavior you want to change. For example, you can focus on reducing unneeded electricity use in vacant rooms or encouraging environment-friendly transportation methods. Think about the decision process relevant to the target behavior and the factors might cause the problem and promote the desired behavioral change. Describe what behavioral principle you are using and how your solution intervenes the decision making process in a way to induce the desired behavior. Next, please design and describe an experiment which will be helpful in testing the effectiveness of your intervention.

Source: Prof. Dilip Soman, University of Toronto Rotman.

 

Behavioral Economics