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Project Background

The project is a collaborative project between the Economic and Social Research Council (ESRC) and the National Natural Science Foundation of China (NSFC). The duration is three years, from 1 January 2017 to 31 December 2019. The investigators are Dr. Helen Bao (PI) and Prof Colin Lizieri (CI) from the Department of Land Economy, University of Cambridge. The overarching research question of this project is whether and how behavioural insights can be used to help rural residents in China make sound financial decisions, which will ultimately contribute to the sustainable economic development in China.

 Although China has almost eliminated urban poverty, the total number of Chinese citizens in poverty remains at 82 million, most of which are rural residents. The development of rural finance is essential to preventing the country from undergoing further polarization because of the significant potential of such development to facilitate resource interflows between rural and urban markets and to support sustainable development in the agricultural sector. However, rural finance is the weakest point in China’s financial systems. Rural households are more constrained than their urban counterparts in terms of financial product availability, consumer protection, and asset accumulation (Po, 2012; Yuan and Xu, 2015; Zhao, Zhang, and Barry, 2014). The development of the rural financial system faces resistance from the demand and supply sides. New products are slow to roll out, and rural households are often reluctant to take up financial incentives or offerings (Asian Development Bank, 2014; Ying, 2015).

 The project aims to address this challenge by investigating the applications of behavioural insights in the development of financial systems in rural China.

The main focus is the application of a proven behavioural approach, namely, “Libertarian Paternalism” or “Nudge” (Thaler and Sunstein, 2009). “Nudge” comes from the representative work by the Economist Richard Thaler, who just won the Nobel Prize in Economics in 2017. This approach promotes choice architectures to nudge people into optimal decisions without interfering with the freedom of choice. It has received recognition in academia and practice in the UK and beyond (Jung, 2016). In 2010, the UK government created the Behavioural Insights Team (BIT), which is the world’s first government institution dedicated to the application of behavioural sciences. Since its inception, the BIT systematically implemented Libertarian Paternalism interventions in diverse areas, such as fraud and debt management, organ donation, tax compliance, and environmental protection (Halpern, 2015). This consensus led to the rise of the behavioural change policies in the UK, which eventually gained recognition worldwide. For example, the New South Wales government founded Australia’s first behavioural insights community of practice in 2012; in 2015, the World Bank created the Global Insights Initiative to incorporate behavioural and social insights in development policies. The applications of Libertarian Paternalism also go beyond the public policy domain. For example, in 2016, HSBC launched a Nudge-based banking application to help its customers manage their finances.

 The project conducts field experiments in rural China to identify psychological and social factors that may potentially affect the development of rural financial systems in China and to cross-validate the existing laboratory experiment results and field evidence from the UK. By relying on field evidence, the project team will develop policy tools and checklists for policy makers to help rural households make sound financial decisions. Many rural households are trapped in persistent poverty because they lack financial and intellectual resources. When new financial policies and tools are available, psychological and social factors (e.g., myopic loss aversion or inertia) prevent them from making the right decisions. The government needs to step in by nudging these households to break out of this persistent poverty cycle and by helping them to develop healthy financial habits to remain on track.

 Among the tools developed for policy makers, digital technology could serve as a powerful enabler to educate and engage rural households in rural China. The penetration of mobile phones is higher than that of clean water and toilets in the developing world (The World Bank, 2016); the popularity of smart phones opens the world to rural residents who cannot read and write in Chinese. e-Nudges, or behavioural interventions delivered digitally, can be particularly cost-effective in rural China. Therefore, this project investigates the potential of combining Nudges with digital technology in rural financial systems and to identify e-Nudges that can be used to help rural households in developing healthy financial habits so that the effect from Nudges can be long-lasting. Specifically, it includes the following questions: 1) Can digital technology be used to implement Nudges in the development of rural financial systems in China? 2) How can behavioural interventions be combined with digital technology in rural China? 3) What e-Nudges can be used to help rural households to develop healthy financial habits?

 Nudges are highly cost-effective tools, but can be misused easily (Gill and Gill, 2012). In order to “nudge for good”, research findings of this project will be disseminated to the community, inform policy makers and regulators about the gold standard for behavioural interventions, and raise the awareness of behavioural policy change in China and to educate the public about the nature and consequences of human limitations.

 

 

 助推”迈向更好的未来:行为经济学在中国农村金融系统发展中的应用

 

本项目为中国国家自然科学基金会员会与英国经济与社会研究理事会合作项目,项目期限三年(2017-2019年),项目负责人为英国剑桥大学土地经济系包晓辉副教授和科林·里奇利教授(系主任),项目关注的核心问题即如何采用行为经济学的方法帮助中国农村居民做出最优的理财决策,最终助力中国经济的可持续发展。

经统计,中国目前仍然拥有8200万贫困人口,其中绝大多数是农村居民。农村金融的发展有助于促进农村和城市之间的资源交流,并支持农业部门的可持续发展,对于防止城市和农村的进一步分化起着至关重要的作用 。但是由于发展不足,农村金融成了中国金融体系中最薄弱的环节。不管是在金融产品的供应,还是消费者保护和资产积累方面,农户都受到了相较城市居民更多的限制。农村金融体系发展因而面临着供需双方的抵制:农村金融产品推出缓慢,农户对相关产品的接受意愿极低。

本项目拟通过调查行为经济学的方法在中国农村金融系统发展中的应用来解决这一挑战。本项目主要关注的是一种叫做“家长制自由主义”或者“助推”的行为经济学方法 。“助推”一词来自于刚刚获得2017年诺贝经济学奖的经济学家理查德×塞勒的标志性作品《助推》。这种方法论述了如何运用选择设计这一新兴思想对人们施加助推力,从而使人们能够做出令自己更加健康和富有的决策,并且维护人们选择的自由。这一方法已经在英国,澳大利亚等国家得到认可,在诈骗和债务管理,器官捐赠,银行等领域进行了实践。2010年,英国政府成立了行为洞察团队,成为全球首个致力于行为科学应用的政府机构。2016年,汇丰银行推出了融合助推的电子银行业务以帮助其客户更好地管理财务。

本项目的目标之一即依托中国农村的实地调研数据,为决策者制定政策工具以“助推”农民做出健康正确的财务决策。农村金融体系及其产品的设计必须考虑农民心理素质及社会偏好,而不是假设他们的财务决策是基于传统经济学所假设的完全理性。现有研究表明,由于缺乏经验和资源,穷人更有可能做出偏离最优的决策(次优决策)。许多农村家庭由于缺乏财力或者知识限制而持续处于贫困状态。当有新的金融政策和财务工具可利用时,他们却因受限于自身心理及社会因素(如短视,损失厌恶或思维惯性)无法做出最优财务决策。这个时候则需要政府或银行机构介入,通过“助推”这些农户养成健康的理财习惯以期推动他们摆脱长期贫困的状态。

在具体实施过程中,电子数字技术可以作为一个强大的助推者。世界银行在2016年的报告中指出:在发展中国家中,手机的渗透率甚至高于其清洁饮水和厕所的渗透率。智能手机的普及使得通过电子方式的行为干预措施成为可能。本项目将测试通过结合“助推”与电子数字技术帮助农户培养健康的理财习惯,具体探讨的问题包括:1)电子数字技术是否可以用于在中国农村金融体系发展中实施推动;2)如果结合电子数字技术和行为干预;3)可以使用哪些电子“助推”帮助农户发展健康的理财习惯。解决如上问题需要和专注“三农”(农村,农业,农民)业务的中国农村商业银行(信用合作社)合作,实施步骤包括根据银行具体情况提出问题,根据银行客户数据分析问题起因,制定和实施相应的(电子)助推计划,通过对比控制组客户和实验组客户结果,选出最优“助推”计划并有条件地推广。