It seems that some people in the UK are reluctant to pay their taxes. We conducted an experiment with these stubborn taxpayers. We sent them a letter with the message, “More than 90% of UK taxpayers pay their taxes on time. You are one of the minority who have not yet paid their taxes.” As a result of the tax reminder experiment, the tax payment rate increased by more than 5%. Although it was only 5%, it was a great result for a single letter. Human behavior is often performed while comparing with others. We used a method that exploits the psychology of people who are concerned about comparisons with others. This method has a great effect with little cost. All we did was add a word to the tax notice. We used a method called nudge to remind late payers to pay their taxes.
Nudges can be divided into information-based nudges and default-based nudges. An example of information-based nudges is drawing footprints on the floor in front of the cash register to encourage customers to line up. It is a pleasant sight to see customers lining up spontaneously after seeing the floor design, even though nothing is forced on them. Another type of nudge, the default nudge, is known to be more effective than general information-based nudges. The majority of Americans reject the default rule that organ donation is the general rule. However, most respondents support the nudge of whether they would like to donate their organs when obtaining a driver’s license. Using this data, a method has also been adopted in which “donate” is pre-populated as an option on the initial setting screen when registering as an organ donor. In some cases, the design of selection situations such as default nudges is designed to guide individual choices in the initial settings.
A behavioral economics technique called nudge has become widely used in the past decade. Nudges are characterized by leaving freedom of choice rather than forcing or prohibiting, and casually encouraging behavioral change. Because of the low political and financial costs, there is a trend for their use to spread. In Japan, a Japanese version of the Nudge Unit was established in 2017, with the Ministry of the Environment as the secretariat. The issues being tackled here are diverse, including efforts to increase the attendance rates of health checkups and cancer screenings, the size of supermarket carts and baskets, mechanisms to encourage people to use stairs, signs posted in bicycle parking areas, toilets in men’s restrooms, and guidance for hand disinfection in stores. It appears that a collaborative system for sharing knowledge gained between the public and private sectors is being developed.
