Behavioural Economics and Irish Public Policy

Professor Liam DelaneyStirling University and UCD Geary

Institute

Background

• 7th Conference in this area• Running since 2008 (ESRI, NUIM, UCD)• Laibson, Sugden, Doherty, Halpern, Kapteyn,

Byrne • Large interest among academics, students, policy

and business • Developing this conference into a more active

network • Ideas and Feedback

Behavioural Economics

• Understanding economic decisions• Integration of Psychology • Increasing Influence in Policy • UK Cabinet Office • Regulatory Bodies• Behavioural Science

Key Ideas

• Bounded Rationality • Self-Control • Experimental Designs• Simplification• Inertia and Defaults • Framing and Labelling

MINDSPACEMINDSPACE

Encouraging Pension Saving

Benartzi & Thaler (2004), Save More Tomorrow, Journal of Political Economy

Illustrative Irish Policy Areas

• Pension Auto-enrolment and Auto-escalation• Simplification of Tax and Insurance Systems• Measurement and Use of Well-Being

Measures• Financial Regulation • Job Search and Employment Activation• Debt Resolution

Example Study: Pensions

• Pension Auto-enrolment one clear option for the Irish system

• Pensions Green Paper • OECD Review• Key question: What if people anchor to these

contributions? • Study of 1004 people carried out by Amarach

No Default Default 0.8 Default 4 Default 80.005.00

10.0015.0020.0025.00

Optimal and experimental saving rates

Optimal saving rateExperimental saving rate

Some Key Questions

• What areas are most promising and interesting?

• How does it fit in democratic process? • How can this research be promoted further in

Ireland? • What are the implications for teaching? • What are the main potentials for policy impact

and how can these be developed?

Network Proposal

• Annual Conference • Website • Board • Student Volunteers• Blog and Mailing List• Public Talks • Research Proposals • Suggestions?