Within the scope of the Behavioural Exchange 2016 at Harvard University, Sebastian Tonke, PhD student at the Cologne Graduate School of the WiSo Faculty received the Junior Scholars Award. The Junior Scholars Award honors young scientists for exceptional innovative research with practical relevance. The honored research project is taking part within the UoC forum „Advancing Common Pool Resource Management“ led by behavioural scientist Prof. Dr. Bettina Rockenbach, who is also supervising the dissertation of Sebastian Tonke.
Behavioural economic findings with practical relevance
In his research, the PhD student uses behavioural cognitions to better the payment morale in rural Namibia. Bills that are not paid impede the supply and maintenance of the water network. In a country threatened by drought and water shortages, this can have catastrophic impacts. But why are costumers not paying their bills? There are many different opinions that range from the scarcity of money to the opinion that it is not proper to pay for money because it is a source given as a gift by god. To get to the real reasons for not paying the bills, the research team at the University of Cologne did more than 380 interviews by phone, interviews with experts and focus group talks.
Study about the willingness to pay
On the ground of this perceptions the researchers made an experimental study with 10.000 costumers. To serve as a basis, a free monthly payment service via text message was implemented. Furthermore the researchers tested two nudges in the form of a voluntary self-commitment strategy. The text message itself led to a rise in payments by 45% and the text message including the self-commitment led even to a rise by 78%. The positive effects of the experimental intervention still maintained one year after the first text message. The unusual and successful intervention shows the potential of behavioral economics when taken to the practice. Moreover, there was an increase of approximately 5% in national revenues in consumer business for the water company who also registered the most successful months since its foundation.
