The Value of Behavioral Policies / John A. List, Matthias Rodemeier, Sutanuka Roy, Gregory K. Sun.

Format:

Book

Author/Creator:

List, John A.

Contributor:

Rodemeier, Matthias.

Roy, Sutanuka.

Sun, Gregory K.

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w35567.

NBER working paper series no. w35567

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2026.

Summary:

Behavioral interventions have become central to modern public policy, but their empirical promise remains contested because estimated treatment effects often appear small. We argue that a policy response is economically meaningful only relative to the response generated by alternative policies. We assemble more than 1,200 estimates from over 600 studies comparing "nudges" and traditional price interventions in the markets for cigarettes, alcohol, influenza vaccination, electricity, and residential water. Translating nudge effects into equivalent price changes, we find that behavioral interventions often correspond to enormous fiscal interventions, from an 11% tax on electricity to a 100% subsidy on influenza vaccinations. Nudges are also more cost-effective than price instruments in all markets, but cost-effectiveness does not predict the welfare ranking of policies. Using a behavioral extension of the Marginal Value of Public Funds, we show that nudges have high welfare returns at the margin, while price instruments often generate larger total surplus at scale.

Notes:

July 2026.

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