The Power of a Nudge

Federal Chief Information Officer Steven VanRoekel has cited innovations from a British government group, informally known as the “nudge unit,” as part of his inspiration for a plan to launch evidence-based innovation projects in non-tech sectors of the executive branch.

The CIO would receive about $6 million for such projects under the president’s proposed fiscal 2014 budget.

The nudge unit combines behavioral psychology and statistics to uncover the most effective way to press people to do things that are good for society at large, such as paying their taxes and insulating their attics. Once the data’s in, the unit focuses on interventions with the best mix of low cost and high return, such as hand signing government letters to delinquent taxpayers or telling them many of their friends and neighbors paid on time.

Freakonomics co-author Stephen J. Dubner has a longer -- and fascinating -- take on the nudge unit here.

Also on the topic of low-cost government interventions with outsize gains, Foreign Affairs has a typically well-researched and comprehensive article this month on big data and the way it’s changing government.

The article includes this story of a big data intervention by New York City Mayor Michael Bloomberg:

Illegally subdivided buildings are far more likely than other buildings to go up in flames. The city gets 25,000 complaints about overcrowded buildings a year, but it has only 200 inspectors to respond. A small team of analytics specialists in the mayor’s office reckoned that big data could help resolve this imbalance between needs and resources. The team created a database of all 900,000 buildings in the city and augmented it with troves of data collected by 19 city agencies: records of tax liens, anomalies in utility usage, service cuts, missed payments, ambulance visits, local crime rates, rodent complaints, and more. Then, they compared this database to records of building fires from the past five years, ranked by severity, hoping to uncover correlations. Not surprisingly, among the predictors of a fire were the type of building and the year it was built. Less expected, however, was the finding that buildings obtaining permits for exterior brickwork correlated with lower risks of severe fire.

Using all this data allowed the team to create a system that could help them determine which overcrowding complaints needed urgent attention. None of the buildings’ characteristics they recorded caused fires; rather, they correlated with an increased or decreased risk of fire. That knowledge has proved immensely valuable: in the past, building inspectors issued vacate orders in 13 percent of their visits; using the new method, that figure rose to 70 percent -- a huge efficiency gain.