Katy Milkman, a professor of operations, information and decisions at the Wharton School of the University of Pennsylvania, and author of the bestseller How to Change: The Science of Getting from Where You Are to Where You Want to Be, is a pioneering scientist in the field of behavioral economics. The New York Times named her book – which she calls a science-based blueprint for achieving your goals — one of the top eight books of 2021 for healthy living, and she was also named one of the world’s top 50 management thinkers. Wharton Global Youth spoke with Dr. Milkman to find out more about the field of behavioral economics and how her research is changing the lives of people and organizations – for good.
Wharton Global Youth Program: What is behavioral economics?
Katy Milkman: Behavioral economics is a field that moves beyond the rational-actor model of standard economic theory. For many, many years, economic theory posited that people are optimal decision-making machines; that we are emotionless, selfish and don’t make mistakes. Behavioral economics steps in where that model leaves off and says, actually, we can be better at describing human nature. We are not perfect decision-making machines. There are some systematic and predictable ways that we err in our judgment. For instance, we care about others, which is not an error, but a deviation from the standard model. Behavioral economics fills in the gaps: let’s get more accurate than we would be if we made a set of not-completely-realistic assumptions about human nature and let’s incorporate some of the systematic and predictable mistakes into our model so we can better describe human nature.
Wharton Global Youth: What inspired you to devote your career to the study of behavior change?
Dr. Milkman: I fell in love with behavioral economics as a graduate student. What always intrigued me about it was once we recognize that people are imperfect, then we have an opportunity to help them generate better outcomes through whatever means necessary to get closer to that perfect decision-making model. The big moment for me when it really became apparent how huge the opportunity was – I was already at Penn and wandered over to the medical school for a seminar. There’s a terrific group over there focused on behavioral economics in medicine. I saw this graph that was mind-blowing. It was a pie chart showing the proportions of premature deaths in the United States that are due to different causes, like environmental exposure, genetics and accidents. One of the wedges in the graph was decisions that people make that could be changed, basically sub-optimal decisions. These were decisions made about things like what we eat, what we drink, whether or not we buckle up when we get into cars, whether we smoke. Shockingly, that wedge about the daily decisions we make accumulating to produce premature death accounted for 40% of the premature deaths in this country, the largest of anything being displayed. That just blew my mind. To see the magnitude of how these small decisions accumulate and have such huge impact, that’s when I decided this would not be something I studied casually, it would be the focus of my whole energy. To try to figure out how we could use insights from this field to close these gaps and help people live longer, save more and achieve more.
Wharton Global Youth: You are co-founder and co-director of the Behavior Change for Good Initiative, a research center at Penn that works to advance the science of lasting change. Your approach is to conduct mega-studies with large organizational partners. What does that work look like?
Dr. Milkman: The Behavioral Change for Good Initiative was founded by myself and Angela Duckworth about six years ago with the goal of accelerating the pace of discovery around positive behavior change research. How can we use the science of behavior change to help individuals and organizations achieve goals that are good for the world? It has a double entendre – we’re also interested in durable change. Some of our work is on short-term change, but a lot of it is also on durable change. The biggest part of the mission is for the social good.
How do we do that? We bring together a team of about 160 scientists from around the world who are leaders in their fields studying behavior change from different perspectives and with different lenses: economists, psychologists, computer scientists, medical doctors, sociologists, a lawyer or two. It’s a mishmash of people interested in change at the individual level. We unite them in this goal and we specialize in what we call mega-studies, which are really massive experiments, as opposed to simple A/B tests to figure out if a hypothesis is true about behavior change. We’ll actually test dozens of different interventions simultaneously in the same populations in order to vastly accelerate knowledge generation. We partner with really large organizations, like Walmart, that have really large customer bases. We think it’s powerful to bring all of these different minds to the table together to try to answer and tackle the same question. We almost force them to rub elbows because now they’re best ideas are in a tournament-style runoff or race with other scientists. For example, economists and psychologists are submitting their best ideas and they’re all being launched simultaneously and they see how they all turn out. We’ve been pioneering this methodology since our inception. We’ve done mega-studies with 24 Hour Fitness, Walmart, Learn Math, Penn Medicine and Geisinger Health, a large bank and a large pharmacy firm. The canonical mega-study that was most useful in accelerating policy insights was a study we did with Walmart to try to get out ahead of figuring out how to communicate with people about vaccines for COVID-19 when they become available.
We’re really proud of the mega-study methodology we’ve developed. We had an important paper introducing this idea and describing it that came out in the journal Nature a couple of years ago. It’s catching fire. We feel that was a major contribution in the way science is done and how we can accelerate things.
Wharton Global Youth: Can you tell us more about the Walmart study?
Dr. Milkman: It’s universally agreed-upon among scientists and policymakers and most business leaders that vaccines were an enormous success story that helped us get back to close to normal [during the pandemic]. Vaccines are only useful in society if people adopt them. You can’t just make them and then hope for the best and hope you can reopen businesses. You’ve got to get them in arms. My team, knowing something about how we encourage behavior change, did a bunch of work to try to help figure out what’s the right way to communicate with people and encourage vaccine adoption as efficiently and effectively as possible. One of our projects was a partnership with Walmart and their 5,000 pharmacies in their stores. They wanted to figure out the best way to communicate with people to encourage vaccine adoption.
So, we ran a mega-study in the fall of 2020. We focused on flu vaccines with the goal of developing insights that could then be used to encourage COVID vaccine adoption, as well as flu vaccine adoption, once the COVID vaccines became available. We went to our team of scientists and said give us your best ideas for what kinds of messages would be most effective. We ended up testing almost two dozen different text-messaging strategies for reaching out to pharmacy patients to encourage them to come get a vaccine. We tested with almost 700,000 patients across the U.S.
Key insights from that study were that the best-performing messages involved repeated reminders, as opposed to one-time communications and that the best wording highlighted that a vaccine was waiting for you, suggesting that it had been set aside and was being recommended by the pharmacy. We published that research, and the messages that vaccines are waiting on reserve for you were later tested and shown to be very effective in promoting COVID vaccinations. Basically, every major pharmacy has started using that kind of ownership language in their communications about vaccines. We also saw state governments using this kind of language and hospital systems. This is a small tweak. We are not changing hearts and minds with this messaging, but rather we are closing a significant gap to increase vaccination rates roughly 10%.
“We’re always trying to figure out how to navigate situations that involve other humans. Behavioral economics gives concrete lessons on how to do that better.” -Dr. Katy Milkman
Wharton Global Youth: A major project you are currently working on is to develop programs to help ease the transition to college and improve outcomes among first-year college students. What inspired this research and how is it going?
Dr. Milkman: In thinking about what was missing in the work we were doing for the Behavior Change for Good Initiative, Angela Duckworth, my co-director and I, felt like most of our interventions to date had been focused on how we could make small changes in reminders and incentives we were offering to individuals to try to change their outcomes for good. But what we really hadn’t done was try to create social change. When we look at the most successful change programs in the world and when we look at what people ascribe major life changes to, it’s normally social. Think about religion, think about Alcoholics Anonymous, think about college. All of the things that really transform lives tend to have a social component. When we thought about a canonical place where having group belonging and group support could really make a huge dent in outcomes for people, we thought of the freshman year of college. Of all the students in this country, 60% of those who begin their college journeys do not finish them. They leave huge value on the table in terms of lifetime earnings, as well as their likelihood to be employed, happy and healthy.
Education is maybe the single most valuable investment a person or a society can make to improve lives. We know from research that one of the key reasons people leave college is [because they don’t feel] a sense of belonging. There are a lot of other barriers to staying in school, like financial and health challenges. Our insights and tools don’t have as much to offer on those important problems, so we leave those to others to tackle. But we might be able to make a dent in this sense of belonging — having friends and feeling like you belong.
We’re partnering with a large number of schools that see a lot of student dropouts. They have diverse populations with diverse needs. We felt that maybe if we could develop belonging interventions, we could create real value. We started with a small pilot last summer and learned a ton. We’re doing another pilot with 50,000 participants or so this summer. The interventions we’ll test this summer will really be just proof-of-concept: introducing students to groups of their peers in a way that builds on insights from behavioral science and behavioral economics to create cohesion. We’ll keep them in touch through texting and various incentives to see if it has any measurable impact on student retention and student grades. Eventually, our aspiration is to create a mega-study formula where different scientists can try different approaches to creating that cohesion. They will be building groups and keeping them in contact throughout their freshman year to try to create that benefit that we know from past research is needed.
Wharton Global Youth: In what ways should high school students recognize and understand the influence of behavioral economics in their lives?
Dr. Milkman: I think the field is incredibly relevant to high school students for a few reasons. You’re social creatures. You’re living your lives and you can’t help but be shaped by these forces. In general, every time you make a purchase, interact with a friend, or make any decision, these insights are relevant. Whether you’re negotiating, you’re purchasing, or you’re attempting to influence others, this is a toolkit that can provide valuable lessons. We’re all students of human nature, whether we intend to be or not. We’re always trying to figure out how to navigate situations that involve other humans. Behavioral economics gives concrete lessons on how to do that better.
An important quantitative component comes with a skillset of understanding statistics and big data, which are relevant in the modern world. That is an exciting and ideal thing to study as a college student and as a high school student. In order to understand how people make decisions better, you need to use big data. Behavioral economics is an exciting place for a young person to be.
Describe the mega-study methodology and how it is accelerating scientific discovery.
Katy Milkman says, “Education is maybe the single most valuable investment a person or a society can make to improve lives.” Do you agree? Why or why not?
Help Dr. Milkman and her colleagues conduct their research. How do you define belonging and what would you need to have a better “sense of belonging” as you head into your freshman year of college?
How are behavioral economics and behavioral science influencing your life? Provide a few examples and share your story in the comment section of this article.