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Hindustan Unilever Ltd
Koninklijke Philips NV
Merck & Co Inc
Johnson & Johnson
The bureaucrats running Mumbai’s suburban rail network had a problem: Commuters and people living and working close to train stations were taking shortcuts across the tracks. This reckless behavior was causing 6,000 deaths in the metropolitan area every year. The transit authorities asked FinalMile, a local marketing consultant, to find a solution. FinalMile had experience in applying behavioral economics to sell consumer goods; the city hoped it could use similar techniques to save lives. FinalMile would do the work for free.
The four founders of FinalMile, who among them have degrees in business administration, engineering, and economics, have worked with Hindustan Unilever (HUVR), Philips Electronics (PHG), Merck (MRK), Johnson & Johnson (JNJ), and others. Co-founder Ram Prasad figured the best behavioral strategy was to make track trespassers less complacent by going beyond the existing warning signs to instill a deep sense of danger. So at Wadala station in central Mumbai, FinalMile hung graphic photos of a train about to run down a screaming man. FinalMile researchers also realized that approaching trains typically began to honk their horn too far away. In densely populated Mumbai, the honking blended in with the aural landscape. So Prasad persuaded the train engineers to blow their horns closer to the station in sharp bursts, making the warning stand out from the cacophony. FinalMile and M. C. Chauhan, chief electrical traction engineer with the Northern Railways, say that deaths at Wadala declined 75 percent, from 40 in 2009 to 10 in 2010.
Since the success at Wadala, the national rail system has commissioned FinalMile to improve safety at India’s 16,000 unmanned rail crossings, where motorists court disaster by racing to cross before trains pass by. FinalMile has picked up other work, too: instruction in safe driving, a plan to keep tuberculosis patients on their medications, and the promotion of toilet use so people won’t defecate in the open (there are more cell phones than toilets in India, according to the United Nations).
Behavioral economics—using social psychology to modify behavior—gained favor in the U.S. a decade ago, when Daniel Kahneman, a psychologist, won a Nobel in economics for his work on the science of decision-making. The concept won more notice in 2008 with the appointment of Cass Sunstein, co-author with Richard Thaler of the book Nudge: Improving Decisions About Health, Wealth, and Happiness, as President Barack Obama’s regulatory boss. (Sunstein is a contributor to Bloomberg View.)
FinalMile co-founder Biju Dominic calls himself and his partners “behavior architects.” They say that many antisocial behaviors in India can be traced to generations of scarcity—of resources and opportunities—and what they call an empathy gap. “We have this idea that whatever little space I get, whatever little opportunity comes my way, I need to make the most of it rather than giving it away, because for the longest time we’ve been used to limited resources,” Prasad says. This fear of scarcity contributes to the inconsiderate driving, line cutting, and pushing and shoving to board trains and buses before they’ve come to a complete stop that characterize any Mumbai commute.
Most of what FinalMile applies to railway safety is based on the idea of the “risk thermostat,” says John Adams, emeritus professor of geography at University College London and author of the influential book Risk. “In order to be safe, you need to feel in danger,” he says, cautioning that the techniques FinalMile used at Wadala could have diminishing returns as people grow used to them.
In its TB project, FinalMile wants to keep patients in a “hot state” that makes them feel so uncomfortable they keep taking antibiotics even after their symptoms have abated. One idea is to personalize the medicine’s packaging with a photo of the sick patient to remind him of his illness. The firm has presented its ideas to three hospitals.
Improving road safety is especially challenging. Adams says there is an empathy gap on the roads and rails of less-developed countries. Less-affluent drivers, he says, generally have a more fatalistic attitude toward risk, while the affluent have a more cavalier attitude about the “chickens, pigs, and peasants” with whom they share the road. FinalMile will soon present to the Maharashtra state government a variation of a plan they developed for Hindustan Unilever, where the consultants used computer driving games that rewarded points to employees for safe driving. The idea was to teach them to drive defensively on their commutes.
One pro bono project in a New Delhi slum was brought to FinalMile by Aditi Dimri, a social worker who had worked on sanitation projects in the area for six years. In her research with FinalMile, Dimri says it became clear that residents felt the slum was a temporary home, so they had no investment in keeping common spaces clean. FinalMile’s solution, tried out in August, was to ask residents of a 50-yard-long alley to place in their home a plastic bracket for hanging a used grocery bag. Above the bracket is an illustration of trash going into a bag and another of a family throwing the bag into a dumpster. Each bracket costs about 50 rupees, roughly a dollar. The idea was to change what Thaler and Sunstein call the “choice architecture” to nudge people to make better decisions.
On a recent visit, the path was swept clean, in stark contrast to neighboring alleys. Gone were the sour smells of clogged drains and wet trash typical of the surrounding area. Says Dimri, “We hope this can be a model for the rest of the slum.”
The bottom line: Indians are using the lessons of behavioral economics to nudge citizens to take fewer risks and behave more responsibly.