Saturday, November 05, 2016

Not So Trivial

(Photo from
Economist Tyler Cowen calls it one of the best and most important job market papers of the year.

Reshmaan Hussam and three other newly minted Economics PhD's authored Habit Formation and Rational Addiction: A Field Experiment in Handwashing. At first glance the subject seems trivial: "everyone knows" that regular handwashing slows the spread of disease.

Reshmaan Hussam
However, like other low-cost beneficial behaviors (eating healthier, exercising moderately, sleeping more), the majority of people don't hand-wash consistently.
“Every home has soap, and everyone knows that handwashing with soap is important, yet hardly anyone [in Bangladesh] does it,” Hussam says. “Existing public health campaigns don’t ask why. If we want to see progress on these simple but valuable preventable health activities, we need to understand the behavioral reasons for why people aren’t taking up [healthy habits].”
The dispenser was specially designed.
Reshmaan Hussam turned her attention to her homeland, Bangladesh, and designed an ambitious study that: 1) incentivized household members to wash their hands regularly, 2) measured the time of day and frequency of handwashing by means of an electronic dispenser, 3) measured a significant reduction in children's respiratory infections and diarrhea, correlated with handwashing.

Perhaps most importantly the researchers found that handwashing became a habit even after the incentives and the monitoring were removed. (The paper has a long technical section on applying the good behavior of handwashing to "rational addiction" theory that economists have used to explain alcoholism and smoking.)
This exercise offers the first well identified estimate of the presence of rational habit formation, and additionally for good habits, in the literature. These findings inform the optimal incentive design of programs that seek to increase the takeup of good habits; namely, if a behavior is habit-forming, then an intervention may do better to front-load incentives, and thereby maximize habit stock, rather than spread incentives over time.
To this humble non-economist, this is the rare economics study that both is insightful and has the potential to save thousands of lives.

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