Friday, June 5, 2015

Randomistas: fighting poverty with science

We have blogged extensively about the merits of randomized trials to help us make better decisions under uncertainty, the topic of Chapter 17.  The WSJ has a report on progress by the "randomistas" on identifying and overcoming the barriers to success.  The following human traits are among the biggest obstacles to rising out of poverty:

• love to gamble regardless of the odds of winning, leading them to bet on underdogs, play the lottery or hit the slot machines;
• value distant risks and rewards much less than current gains and losses;
• often lack the motivation to pursue their own best interest unless it can be done almost effortlessly—declining to get vaccinated, for instance, until they are given a map of where the clinic is located;
• procrastinate, putting off until tomorrow just about everything they can get away without doing today;
• put money into arbitrary buckets, creating different “mental accounts” for various purposes, even though all dollars should be equal;
• want the comfort of knowing that others agree with them;
• are impatient to their own detriment, preferring to take pension payments in one lump sum rather than as an annuity spread over time or to start receiving Social Security payments as soon as possible instead of deferring them.

1 comment:

  1. Social science is an increasing popular literary genre, with books like Daniel Pink's "Drive" or Robert Cialdini's "Influence." These books and many others are based on scientific studies and can inform interested readers who crave self improvement. What about the vast majority who are not ever exposed to this. Why not include parenting classes, life planning, personal finance and vocational skills as more of the High School core curriculum. Let's invest in helping youth make good life decisions wherever possible. We also can use science to identify individual talents for improved career counseling in our educational system. We can also partner local High Schools, community, and four year colleges with surrounding private industry to fill voids in the skill sets that employers are searching for. The ideas and solutions for a great society abound. Unfortunately, the void is in today's political class. We've always had big money buying influence. What we lack today is the art of governance. We have paralysis in government. David Books of the NYTimes stated that to today's Republican Party "comprimise is corruption," and that Republicans are no longer traditional conservatives, but revolutionaries who don't know how to govern. I think the best way to fight poverty is through good governance.

    Brooks, David. The Republicans' Incompetence Caucus. NYTimes, October 13, 2015