About the experiment
The purpose of the experiment was to encourage those with financial debt to pay their debts and to increase the number of customers who pay the water corporation through a standing order.
Research Method
The study studied 6,000 households in Jerusalem and Netivot.
The study examined whether the use of behavioral economics tools helps achieve the goals.
Debtors were contacted by various letters and text messages and their effectiveness. The experiment examined ‘evidence-based policies’ – that is, during the experiment the most effective measures, their frequency and manner of use were examined.
The researchers were, Dr. Tiran Rotman, Head of the Department of Economics and Management at the WIZO Academic Center, and Prof. Doron Kliger, Head of the Department of Economics at the University of Haifa.
Key insights
- The results are positive and the payment of debt was driven by behavioral interventions.
- The more effective modes of referral were:
- Mention of the amount of debt and separately mention of the cost of interest accrued since the last inquiry.
- Specifying that the debtor can send the corporation a reasoned written request, and then the corporation can consider avoiding enforcement processes.
- Most of the effect was among apartment renters who do not own properties and among those with debt below the median debt (about NIS 1,000)
- The experiment was successful in motivating the company’s customers to join the payment through standing orders.
- Texting the residents of the customer’s specific neighborhood was effective.
- Sending text messages in the morning was more effective.
Summary of a behavioral economics experiment ( on the B-economics website)
Download the Water Authority’s summary – behavioral economics experiments conducted at Hagihon and Ashkelon Water
