6 Questions for Wharton Behavioral Economist Katy Milkman
Katy Milkman, a professor of operations, information and decisions (OID) at the Wharton School of the University of Pennsylvania, and author of the bestseller How to Change: The Science of Getting from Where You Are to Where You Want to Be, is a pioneering scientist in the field of behavioral economics. The New York Times named her book – which she calls a science-based blueprint for achieving your goals — one of the top eight books of 2021 for healthy living, and she was also named one of the world’s top 50 management thinkers. Wharton Global Youth spoke with Dr. Milkman to find out more about the field of behavioral economics and how her research is changing the lives of people and organizations – for good.
Wharton Global Youth Program: What is behavioral economics?
Katy Milkman: Behavioral economics is a field that moves beyond the rational-actor model of standard economic theory. For many, many years, economic theory posited that people are optimal decision-making machines; that we are emotionless, selfish and don’t make mistakes. Behavioral economics steps in where that model leaves off and says, actually, we can be better at describing human nature. We are not perfect decision-making machines. There are some systematic and predictable ways that we err in our judgment. For instance, we care about others, which is not an error, but a deviation from the standard model. Behavioral economics fills in the gaps: let’s get more accurate than we would be if we made a set of not-completely-realistic assumptions about human nature and let’s incorporate some of the systematic and predictable mistakes into our model so we can better describe human nature.
Wharton Global Youth: What inspired you to devote your career to the study of behavior change?
Dr. Milkman: I fell in love with behavioral economics as a graduate student. What always intrigued me about it was once we recognize that people are imperfect, then we have an opportunity to help them generate better outcomes through whatever means necessary to get closer to that perfect decision-making model. The big moment for me when it really became apparent how huge the opportunity was – I was already at Penn and wandered over to the medical school for a seminar. There’s a terrific group over there focused on behavioral economics in medicine. I saw this graph that was mind-blowing. It was a pie chart showing the proportions of premature deaths in the United States that are due to different causes, like environmental exposure, genetics and accidents. One of the wedges in the graph was decisions that people make that could be changed, basically sub-optimal decisions. These were decisions made about things like what we eat, what we drink, whether or not we buckle up when we get into cars, whether we smoke. Shockingly, that wedge about the daily decisions we make accumulating to produce premature death accounted for 40% of the premature deaths in this country, the largest of anything being displayed. That just blew my mind. To see the magnitude of how these small decisions accumulate and have such huge impact, that’s when I decided this would not be something I studied casually, it would be the focus of my whole energy. To try to figure out how we could use insights from this field to close these gaps and help people live longer, save more and achieve more.
Wharton Global Youth: You are co-founder and co-director of the Behavior Change for Good Initiative, a research center at Penn that works to advance the science of lasting change. Your approach is to conduct mega-studies with large organizational partners. What does that work look like?
Dr. Milkman: The Behavior Change for Good Initiative was founded by myself and Angela Duckworth about six years ago with the goal of accelerating the pace of discovery around positive behavior change research. How can we use the science of behavior change to help individuals and organizations achieve goals that are good for the world? It has a double entendre – we’re also interested in durable change. Some of our work is on short-term change, but a lot of it is also on durable change. The biggest part of the mission is for the social good.
How do we do that? We bring together a team of about 160 scientists from around the world who are leaders in their fields studying behavior change from different perspectives and with different lenses: economists, psychologists, computer scientists, medical doctors, sociologists, a lawyer or two. It’s a mishmash of people interested in change at the individual level. We unite them in this goal and we specialize in what we call mega-studies, which are really massive experiments, as opposed to simple A/B tests to figure out if a hypothesis is true about behavior change. We’ll actually test dozens of different interventions simultaneously in the same populations in order to vastly accelerate knowledge generation. We partner with really large organizations, like Walmart, that have really large customer bases. We think it’s powerful to bring all of these different minds to the table together to try to answer and tackle the same question. We almost force them to rub elbows because now they’re best ideas are in a tournament-style runoff or race with other scientists. For example, economists and psychologists are submitting their best ideas and they’re all being launched simultaneously and they see how they all turn out. We’ve been pioneering this methodology since our inception. We’ve done mega-studies with 24 Hour Fitness, Walmart, Zearn Math, Penn Medicine and Geisinger Health, a large bank and a large pharmacy firm. The canonical mega-study that was most useful in accelerating policy insights was a study we did with Walmart to try to get out ahead of figuring out how to communicate with people about vaccines for COVID-19 when they become available.
We’re really proud of the mega-study methodology we’ve developed. We had an important paper introducing this idea and describing it that came out in the journal Nature a couple of years ago. It’s catching fire. We feel that was a major contribution in the way science is done and how we can accelerate things.
Wharton Global Youth: Can you tell us more about the Walmart study?
Dr. Milkman: It’s universally agreed-upon among scientists and policymakers and most business leaders that vaccines were an enormous success story that helped us get back to close to normal [during the pandemic]. Vaccines are only useful in society if people adopt them. You can’t just make them and then hope for the best and hope you can reopen businesses. You’ve got to get them in arms. My team, knowing something about how we encourage behavior change, did a bunch of work to try to help figure out what’s the right way to communicate with people and encourage vaccine adoption as efficiently and effectively as possible. One of our projects was a partnership with Walmart and their 5,000 pharmacies in their stores. They wanted to figure out the best way to communicate with people to encourage vaccine adoption.
So, we ran a mega-study in the fall of 2020. We focused on flu vaccines with the goal of developing insights that could then be used to encourage COVID vaccine adoption, as well as flu vaccine adoption, once the COVID vaccines became available. We went to our team of scientists and said give us your best ideas for what kinds of messages would be most effective. We ended up testing almost two dozen different text-messaging strategies for reaching out to pharmacy patients to encourage them to come get a vaccine. We tested with almost 700,000 patients across the U.S.
Key insights from that study were that the best-performing messages involved repeated reminders, as opposed to one-time communications and that the best wording highlighted that a vaccine was waiting for you, suggesting that it had been set aside and was being recommended by the pharmacy. We published that research, and the messages that vaccines are waiting on reserve for you were later tested and shown to be very effective in promoting COVID vaccinations. Basically, every major pharmacy has started using that kind of ownership language in their communications about vaccines. We also saw state governments using this kind of language and hospital systems. This is a small tweak. We are not changing hearts and minds with this messaging, but rather we are closing a significant gap to increase vaccination rates roughly 10%.
“We’re always trying to figure out how to navigate situations that involve other humans. Behavioral economics gives concrete lessons on how to do that better.” -Dr. Katy Milkman
Wharton Global Youth: A major project you are currently working on is to develop programs to help ease the transition to college and improve outcomes among first-year college students. What inspired this research and how is it going?
Dr. Milkman: In thinking about what was missing in the work we were doing for the Behavior Change for Good Initiative, Angela Duckworth, my co-director and I, felt like most of our interventions to date had been focused on how we could make small changes in reminders and incentives we were offering to individuals to try to change their outcomes for good. But what we really hadn’t done was try to create social change. When we look at the most successful change programs in the world and when we look at what people ascribe major life changes to, it’s normally social. Think about religion, think about Alcoholics Anonymous, think about college. All of the things that really transform lives tend to have a social component. When we thought about a canonical place where having group belonging and group support could really make a huge dent in outcomes for people, we thought of the freshman year of college. Of all the students in this country, 40% of those who begin their college journeys do not finish them. They leave huge value on the table in terms of lifetime earnings, as well as their likelihood to be employed, happy and healthy.
Education is maybe the single most valuable investment a person or a society can make to improve lives. We know from research that one of the key reasons people leave college is [because they don’t feel] a sense of belonging. There are a lot of other barriers to staying in school, like financial and health challenges. Our insights and tools don’t have as much to offer on those important problems, so we leave those to others to tackle. But we might be able to make a dent in this sense of belonging — having friends and feeling like you belong.
We’re partnering with a large number of schools that see a lot of student dropouts. They have diverse populations with diverse needs. We felt that maybe if we could develop belonging interventions, we could create real value. We started with a small pilot last summer and learned a ton. We’re doing another pilot with 50,000 participants or so this summer. The interventions we’ll test this summer will really be just proof-of-concept: introducing students to groups of their peers in a way that builds on insights from behavioral science and behavioral economics to create cohesion. We’ll keep them in touch through texting and various incentives to see if it has any measurable impact on student retention and student grades. Eventually, our aspiration is to create a mega-study formula where different scientists can try different approaches to creating that cohesion. They will be building groups and keeping them in contact throughout their freshman year to try to create that benefit that we know from past research is needed.
Wharton Global Youth: In what ways should high school students recognize and understand the influence of behavioral economics in their lives?
Dr. Milkman: I think the field is incredibly relevant to high school students for a few reasons. You’re social creatures. You’re living your lives and you can’t help but be shaped by these forces. In general, every time you make a purchase, interact with a friend, or make any decision, these insights are relevant. Whether you’re negotiating, you’re purchasing, or you’re attempting to influence others, this is a toolkit that can provide valuable lessons. We’re all students of human nature, whether we intend to be or not. We’re always trying to figure out how to navigate situations that involve other humans. Behavioral economics gives concrete lessons on how to do that better.
An important quantitative component comes with a skillset of understanding statistics and big data, which are relevant in the modern world. That is an exciting and ideal thing to study as a college student and as a high school student. In order to understand how people make decisions better, you need to use big data. Behavioral economics is an exciting place for a young person to be.
Conversation Starters
Describe the mega-study methodology and how it is accelerating scientific discovery.
Katy Milkman, a Wharton professor of operations, information and decisions, says, “Education is maybe the single most valuable investment a person or a society can make to improve lives.” Do you agree? Why or why not?
Help Dr. Milkman and her colleagues conduct their research. How do you define belonging and what would you need to have a better “sense of belonging” as you head into your freshman year of college?
How are behavioral economics and behavioral science influencing your life? Provide a few examples and share your story in the comment section of this article.
I think behavioural economics accounts for an important part in everyday life. By definition, the law of demand for example, is “the price of a good or service increases, the quantity demanded decreases, and vice versa for a decrease in price, assuming ceteris paribus. “. The questions that arise in my mind are, what if ceteris paribus does not apply? What if consumers are not thinking rationally? Thus I think studying behavioural economics is essential.
In the realm of high school level, we can hardly know the idea of who is a behavioral economist; all the models and concepts we learn are based on an ideal world—people are rational and utilitarian, and it sometimes really makes me curious about what if people aren’t rational, just like in the real world scenario. During the Covid time, many people refused to take vaccines because people believe that the vaccines are harmful, creating an inventory surplus and positive externalities. It was through those government perks and advertisements that elevated the rate of vaccines taken. Because people’s positions can be easily swayed since we are very biased and susceptible, behavioral economists ensure people make rational and sound choices, maximizing the total benefits. Therefore, I really appreciated what behavioral economists have done for us.
I found this interview with Katy Milkman incredibly fascinating and inspiring as a teenager who spends her free time studying economic concepts. Her work in behavioral economics sheds light on our human tendencies while offering practical solutions to societal problems. In many ways, Dr. Milkman’s research resonates with my personal experiences. I can recall instances where my decisions, though seemingly trivial at the time, had substantial impacts later. This aligns with her point about how “small decisions accumulate and have such a huge impact”. For instance, simply joining the economics club at my high school initially seemed insignificant, but over time, I found myself leading a platform for students to engage in economic discussions, explore ideas and develop a deeper understanding of economic concepts. Dr. Milkman’s work on the mega-study methodology embodies the spirit of collaboration and demonstrates the power of collective intelligence. Despite coming from different backgrounds, we found our sense of belonging with our unique perspectives on economic issues given our cultural and social contexts. Our discussions often resembled a form of a mega-study, with ideas being thrown around and debated, ultimately leading to a richer understanding of economics.
The reference to the Walmart study brought to mind the profound influence of behavioral economics in shaping public health decisions. During the COVID-19 pandemic, our community was faced with the decision of whether or not to take the vaccine. Dr. Milkman’s research, involving language that induces a sense of ownership, reminded me of the text messages everyone received, encouraging people to get vaccinated. Now, understanding the rationale behind the “your vaccine is waiting for you” phrase, it’s evident how subtle language changes can significantly impact behavior. This article has deepened my appreciation for behavioral economics, showing me how the field extends beyond mere theories and into practical, life-changing applications. I am inspired by her research and eager to apply the principles of behavioral economics in my daily life and future academic endeavors. It’s amazing to see how economics, a subject I love, is being used to facilitate meaningful change and improve people’s lives.
Thank you Ms. Milkman for not only the concise yet information-filled responses but also the efforts that you and others at the Behavior Change for Good Initiative are making!
I think that behavioral economics has to be one of the more prominent heterodox economic fields at the moment. As a high school student, behavioral economics can be particularly applicable to new improvements in student life. Understanding the principles of behavioral economics can provide valuable insights into improving academic performance, time management, and overall well-being. As an example, understanding present bias, where individuals tend to prioritize short-term gratification over long-term goals, can help students develop strategies to overcome procrastination and improve study habits.
As Ms. Milkman poses, “Education is maybe the single most valuable investment a person or a society can make to improve lives.” Human capital can benefit highly skilled and educated individuals to generate new ideas, develop advanced technologies, and improve production processes, leading to higher economic output. This can be easily seen in the innovation of AI. AI, whilst displacing some current jobs, is bound to foster a new industry, which will boost total factor production. Thank you, Ms. Drake and Ms. Milkman for an interesting read!
As November 2022 came to a close, I set out to accomplish an elusive goal: writing my first book. Admittedly, this undertaking was daunting. My plan was to convey my knowledge and experience in finance and economics through publication. Despite recognizing the dangers of present bias, that overwhelming urge for immediate gratification versus long-term benefits, I found myself giving in time and time again to TikTok’s alluring call. One hour led to another, as I mindlessly scrolled down the never-ending feed distracting me from achieving what I had set out to do.
One momentous day transformed my literary adventure forever. I stumbled upon a new world: the captivating realm of behavioral economics. The secrets it held beckoned me to weave them into the tapestry of my book, despite my limited understanding of the subject. Determined to learn more, I scoured the internet for knowledge and discovered a tome titled “How to Change: The Science of Getting from Where You Are to Where You Want To Be,” penned by Katy Milkman.
As I flipped through Milkman’s book, a sudden realization hit me like a wave. Hidden within its pages was the secret to self-improvement—a treasure trove overflowing with tips and strategies. The concepts of fresh start effect, temptation bundling, and commitment devices engulfed my mind, seeping deep into my soul. Motivated and equipped with these newfound tools, I prepared myself for an epic battle against present bias. And so it began – my thrilling journey towards completing my masterpiece.The fresh start effect, a phenomenon imbued with the power to ignite motivation, became my guiding light. It whispered promises of change, of new beginnings. While its potency is most profound during major life transitions, such as the dawn of a college chapter or the embrace of a new city, it proved equally potent as I stood on the precipice of a new year—2023. With this invigorating surge of motivation, I harnessed my focus and composed the entire first chapter of my book within a mere week and a half. The triumph was nothing short of miraculous, prompting me to share the strategy with friends who marveled at the potential locked within the timing of new habits. Emboldened by this early victory, I forged ahead to conquer the second chapter.
My triumph was short-lived, as I soon realized that motivation is fleeting. It has a tendency to wane and leave behind emptiness. However, instead of being discouraged by this realization, I decided to strengthen my approach. I incorporated both temptation bundling and the indomitable commitment device into my arsenal. Dr. Milkman explains that a commitment device acts like an obstacle in our path, halting our impulses towards negative behavior. Drawing inspiration from parental discipline methods, I asked my parents to confiscate my phone if I failed to meet my predetermined page quota. Although it may sound familiar from childhood days of punishment, this self-imposed discipline became a catalyst for unparalleled progress. I also decided to try a new trick from my playbook – temptation bundling. This strategy involves pairing an enjoyable activity with a less desirable one, reducing the time spent on the first while augmenting the pleasure of the latter. So, I allowed myself to indulge in watching cartoons while delving into finance-related research for my book. The result was striking – a satisfying balance between cartoon enjoyment and increased productivity that left me feeling victorious.
Time passed quickly and now I find myself in the final stretch of my literary journey. My goal is to finish my book within a month, and it seems achievable. Looking back, I am grateful to Dr. Milkman who supported me throughout this transformative journey through the behavioral science methods taught in her book. I used to see myself as an unbeatable decision-making machine, untouchable by emotions and boosted with unwavering discipline until I stumbled upon a gem of a book called “How to Change: The Science of Getting from Where You Are to Where You Want To Be.” Milkman’s comprehensive research on behavioral science completely altered my perspective on conquering new challenges and achieving goals. It made me realize that I’m only human, imperfect and prone to laziness and present bias. However, adopting the strategies recommended within its pages transformed me into a more productive, resolute version of myself.
As humans, we have the burning desire to analyze and learn from one another through meaningful interactions. Psychology came along as a field of study somewhat recently in historical terms about a few centuries ago. While psychology is a field in itself, its core elements are present in many other parts of life: careers, relationships, and even food.
When we try to show our understanding of humans, or hardships, there are a lot of mediums that are used to do so, with one of the most popular being movies. I recently joined in on the Barbenheimer movie takeover. Dressed in all pink, I went with my friends to watch the movie of the year. What we expected was the classic girly rom-com theme, but I came out of the theaters with a dried face of tears. Barbie, as many girls would say, was a love letter to girlhood. In a society that has been dominated by males for so long, Barbie’s freshness gave girls the chance to create special bonds before their “girlhood” was over. It also gave me the time to reflect on my relationship with my mother.
In the aspect of the quote that mentions “We are all students of human nature”, reminds me a lot of the same saying: “This is all our first time living.” Nobody has consciously lived two lives in separate bodies and knows how to navigate their way the second time–it is all our first time doing everything. This is my opinion, of course. No matter how old we get, we will always have something that is our first.
My mother had me when she was 22 years old. I am the first child, so growing up, she had to navigate her way through taking care of a child. Now, when I see how she takes care of my youngest brother, who she had when she was about 35 years old, I see the major differences. My mom is now well-prepared to take on any challenges that she previously did not know how to overcome when she was taking care of me.
During my childhood, most of my time was dedicated to the family store: I would stock up the chips, help out the customers, and move around the store on shopping carts. As I got older, I started to take notice of the customers that came in frequently–almost as if in a pattern. Some customers came in daily to buy the same things: an older lady would come in once a week before dinnertime to buy two gallons of tea–one green and one classic. Another man would wait for us to open up at 8am, waiting there to buy his morning pack of cigarettes. I began to wonder why the customers purchased these items–the reason that made them do so. In the neighborhood that my family’s store was situated in, nicotine and cigarette addictions were the major problems. I soon realized that these were learned habits, ones that are almost hereditary: most adults that smoked had parents who smoked or displayed similar habits. My tendency to analyze customers’ behavior connects back to the second part of the quote about how we’re trying to navigate situations that involve other humans.
When I read this quote, I also thought about how people are always trying to understand themselves through music, which is why I think people are so obsessed with listening to it all the time. George Gurdjieff, who suggested that music merely ‘takes the mind to stranger and crazier places.’ Or, Beethoven who expressed that music ‘transports the listener into the mind of the composer.’ As such, we are not understanding ourselves but perhaps experiencing what it might be like to experience how others experience themselves. Not understanding ourselves immediately as individuals, but rather as humans and capable of harmonizing. Taylor Swift, a famed musical artist for her creativity in connecting one song to another and having many layers to her lyrics, has been one of my favorite singers of all time. She has followed me throughout my girlhood and gone through her eras: Reputation, Folklore, Evermore, Midnights. When I first listened to her as a 10-year-old girl, I could not relate to her lyrics about heartbreak. However, as I grew up alongside her music, I started to understand the gut-wrenching lyrics of “this is me trying” and “All Too Well.” When listening to Taylor’s music, we understand her better, but also ourselves too. I think this is a major role in the quote as we navigate situations that yes, relate to other humans, but also are universal. First-love and heartbreak are two very emotional yet common occurrences, and when we end up in those situations, Taylor Swift is always by our side to teach us how to respond.
My school’s anti-racist club has members who all come from many different backgrounds and hold many different identities: some are from the LGBTQ+ community, and some are from different parts of the world. Still, we come united in a classroom to discuss one major issue: racism. In our club, we don’t turn anyone away or talk down on anyone, but rather we try to understand them and see what we can do to alter their perspectives and alternate views. Following Gandhi and MLK’s principles, we try to resolve the problem of lack of education and exposure. Within our school, I have noticed that the reason why many people may make micro-racist comments or show a lack of care for cultural differences is because they do not know enough about said culture to show respect or were not exposed enough to it in order for it to seem like it is “normal.” Anything can be normal, just depending on how exposed we are to that said thing and culture. In some ways, our club has taken the “we are students of human nature” part quite literally; we have done book drives and read to elementary school kids to get them to understand the entire beauty of human nature and be exposed to identities that should be normalized. We also take the second part of the quote into consideration to find ways to benefit both sides; when we are faced with injustice, we navigate those situations by doing peaceful protests and we attend school board meetings to go speak with the opposing side to navigate that situation and get them to understand the student perspective on the book ban. We do not fight them in aggressive ways but only try to provide them with insight through peaceful methods.
In a world where the brain has not fully been understood yet, there is still so much to learn about ourselves even if we think we know ourselves well enough. After all, it is our first time living, but that is perfectly fine, and mistakes are what shape us to be more unique and special–that is what I have learned so far in the 16 (almost 17) years I’ve lived.
Katy Milkman, a prominent professor of operations, information, and decisions at the Wharton School of the University of Pennsylvania, has made significant contributions to the field of behavioral economics. Her bestselling book, “How to Change: The Science of Getting from Where You Are to Where You Want to Be,” has received acclaim as a science-based guide to achieving personal goals. Recognized by The New York Times as one of the top books of 2021 for healthy living, Katy Milkman’s work extends beyond writing. She has been acknowledged as one of the world’s top 50 management thinkers.
In the realm of behavioral economics, Katy Milkman’s research and insights challenge the traditional economic model that assumes people are rational decision-makers. Behavioral economics acknowledges human imperfections and explores predictable patterns in decision-making. It recognizes that individuals often deviate from purely rational choices due to emotions, biases, and social influences.
Katy Milkman’s dedication to the study of behavior change stems from her fascination with the potential for improving outcomes by helping individuals make better decisions. Her research is driven by the belief that, once we understand human imperfections, we can design interventions to guide individuals toward more optimal choices.
She co-founded and co-directs the Behavior Change for Good Initiative, a research center at the University of Pennsylvania. This initiative aims to advance the science of lasting behavior change, with a focus on promoting positive behaviors that benefit individuals and society as a whole. A central aspect of their approach involves conducting mega-studies, large-scale experiments that involve collaboration with major organizations to accelerate the discovery of effective behavior change strategies.
One noteworthy project Katy Milkman is leading focuses on easing the transition to college and improving outcomes for first-year college students. Recognizing that a sense of belonging is crucial to student success, her research explores interventions designed to foster social cohesion and support among college freshmen. By leveraging insights from behavioral economics, these interventions aim to enhance student retention and academic performance.
For high school students, understanding the principles of behavioral economics can be highly relevant in their daily lives. It equips them with valuable tools to navigate social interactions, make informed decisions, and recognize the influence of biases and emotions on their choices. Additionally, the quantitative skills and data analysis techniques associated with this field are increasingly important in today’s data-driven world. As such, behavioral economics offers high school students insights into both human behavior and practical skills that can benefit them in various aspects of life.
Human psychology is full of wonders, yet economic theories often set this consideration aside, assuming the rationality of human beings as agents looking to maximize utility. However, reality often proved otherwise — we aren’t always as ‘rational’ as we hope to be. Indeed, humans can be more empathetic, prone to mistakes, and irrational than we’d like to believe. That’s why I share Katy Milkman’s passion for behavioral economics. Milkman’s awe-inspiring Walmart study demonstrated that a simple change in phrasing can lead to drastic differences in outcomes. This is the power of behavioral economics; it can be a powerful tool for policymakers to drive economic growth and enhance citizen’s health and quality of life.
Just recently, I came across Cass Sunstein and Richard Thaler’s book Nudge and was inspired by their understanding of the impact of how ‘nudges’ can influence human behavior. Milkman’s college project and her interventions similarly ‘nudge’ students to establish a sense of belonging. I’m eager to learn more about the results! Additionally, Sunstein and Thaler’s concept of ‘sludge,’ which refers to elements that complicate decision-making processes, can sometimes be beneficial. For instance, if the drop-out process for college students is cumbersome (eg. requiring multiple forms, parental and teacher consent, and a reconsideration period), it might reduce drop-out rates.
Overall, I see a great future for behavioral economics and am fascinated to read more about Milkman’s studies!