The Inclusive Economy
CFED, ideas42 and the Citi Foundation Launch the BETA Project
Posted on 09/04/2012 @ 04:00 PM
This morning, CFED, ideas42 and the Citi Foundation announced the launch of the Behavioral Economics Technical Assistance (BETA) Project. The goal of the BETA Project is to tackle tough social problems by designing and testing behavioral interventions on real world products, processes and/or services.
What is behavioral economics? It is the study of how people make choices – not in a simplified economic model, but in the textured and rich reality of daily life. Traditional economic models assume that people are highly rational and pursue their goals consistently, without mistakes or need for help. For example, retirement planning, under the traditional economic model simply involves a household calculating the funds needed for retirement and then reducing consumption to meet the savings goal. As we all know, however, the reality is that Americans consistently under-save and are often unprepared for retirement.
The BETA project brings insights from behavioral economics to the asset-building field. Through the BETA project, CFED and ideas42 will work collaboratively with three to five organizations to pilot a behavioral intervention within an asset-building program or service. Behavioral interventions come in a wide range of forms, but can be broadly defined as manageable, low-cost program adjustments informed by research in behavioral economics and psychology. For example, an organization may help low-income clients save by sending them short text messages reminding them of their savings goals on payday. Past research has shown that small tweaks like this can have a powerful impact.
These three to five pilot organizations will be selected through a competitive application process. Click here to read more about the project, selection criteria and timeline.
On October 4, CFED and ideas42 are hosting a Q&A webinar to explain the structure of the BETA Project, describe the ideal pilot program, provide tips for a successful application, and give participants the opportunity to ask questions. There will also be multiple behavioral economics sessions at the 2012 Assets Learning Conference, including Behavioral Economics 101 and Behavioral Interventions to Boost Savings Rates.
Through the BETA Project, CFED, ideas42, and selected organizations will participate in a behavioral mapping process to tease out the sequence of events from client engagement to client outcomes. The behavioral mapping process is performed from the perspective of the client or customer, rather than the organization. The goal is to understand every possible step in the process and unearth the barriers and potential psychologies at play that are inhibiting decision choice, action, or both.
CFED and ideas42 experts will work collaboratively with selected organizations to design a behavioral intervention using an understanding of the program's context, processes, goals and barriers. The intervention may involve adding, changing or taking away from current processes. The BETA Project team will then evaluate the intervention and share findings with the broader field.
All of us at CFED, ideas42 and the Citi Foundation are incredibly excited to embark on this project. We believe that applying a behavioral economics lens will provide us with a fresh perspective on many of the challenges asset building organizations are facing.
Click here to learn more and download the request for proposals. Proposals are due October 19.
The BETA Project is part of the Assets & Opportunity Network’s Intensive Learning Clusters – which are time-limited, thematically-based, small groups that learn from each other and outside experts to advance a learning agenda on specific topics or approaches. Learnings from the BETA Project, along with a myriad of behavioral economic-related research and resources, will be featured on CFED's Blog and Behavioral Economics site.
Opportunities to participate in these Intensive Learning Clusters are limited exclusively to members of the Assets & Opportunity Network. Click here to join the Network!