How legal messaging increased TV and radio license fee compliance by 15%

Natural field experiment: a study that unobtrusively assesses the effects of realistic treatments on subjects in a real-world setting.

Moral appeal: messages that appeal to a person’s sense of morality.

Deterrence hypothesis: the assumption that crime can be deterred by adjusting the severity and probability of punishment through stricter law enforcement.

Compliance can be due to legal threats and/or social norms  

In most legal systems, the general approach to ensuring compliance follows the deterrence hypothesis, ​​which is the idea that individuals will rationally avoid breaking the law to avoid harsh punitive measures. However, it is difficult to disentangle the extent to which deterrence of criminal activity is done through  formal laws, or through  informal social dynamics.² For example, you may not want to rob a bank to avoid jail time, but you may also not want to rob a bank for moral reasons (it’s somebody else’s hard-earned money) or social reasons (your parents would be very disappointed in you). The answer to this problem remains unclear, as research on enforcement strategies that use both behavioral motives and deterrence threats is limited. 

Formal sanctions can be difficult to enforce

Using formal sanctions to increase compliance can be particularly challenging to enforce when it comes to the use of public goods. For example, most radio and television broadcasting globally is freely accessible and is often financed through TV and radio license fees that are paid by the consumers. As people can still use the goods without paying the fee, an enforcement problem arises. Austria has a license fee system where households must register that they own a TV or radio and then pay the fees. If an evader is detected, they will be subject to a large fine. Although Austrians are aware of the legal sanctions associated with evading the fees, about 6% of the population still do not comply. Can behavioral insights, along with the legal sanctions, nudge the remaining 5% to comply?

A natural field experiment

With a sample of 50,498 potential evaders in Austria, the researchers conducted a large-scale natural field experiment. To begin, 95% of the sample was randomly allocated to receive one of three letters from the ‘Fee Information Service’ (Austria’s organization responsible for collecting and enforcing the license fee). The text in each letter varied depending on the treatment:

1. Legal threat: emphasized the high detection risk, the legal perils, and the financial consequences of non-compliance. While the objective legal risk remains the same in all treatments, this condition emphasizes it. 
2. Moral appeal: appealed to the subject’s morals by highlighting that not complying would be unfair to honest households.
3. Social information: highlighted the norm of compliance by revealing that 94% of the population typically complied.

Each letter also included a response form and postage prepaid envelope. A randomly selected 5% of the population were used as a control group and were not sent mail. The effects of the treatments were evaluated by comparing responses from the 95% who were sent mailings to both the control group and the baseline treatment (the behavior prior to the intervention). 

Survey to gauge perception

Since actual legal sanctions remained constant, any change in behavior can be attributed to the recipients’ subjective perceptions on evading the fees. To assess this, a follow-up survey was conducted with a different sample. The participants were shown the letters used in the field experiment and asked to report their perceptions on the risk of being caught, the penalty, and potential social consequences. 

The MINDSPACE framework

The MINDSPACE Framework outlines nine forces that drive human behavior that can be used to optimize public policy interventions: Messenger, Incentives, Norms, Defaults, Salience, Priming, Affect, Commitments, and Ego.

In this example, the MINDSPACE elements utilized include the messenger (who communicates the information), incentives (what motivates the behavior), norms (environmental influences on behavior), and defaults (our tendency to stick to the status-quo). Taken together, the researchers could better understand the behavior of fee evaders and to create interventions to increase compliance. 

Incentives and defaults were identified as being two forces that could be shaping compliance behavior. The researchers take into account incentives by considering how people assess the costs and benefits of evading fees. The monetary charge that is imposed if people do not comply is assumed to disincentivize people to evade fees. They also recognize that the default of broadcasting services as free means people are more likely to maintain the status-quo and not pay unless prompted to do so. 

The messenger and norms were identified as two forces that could change behavior. By sending letters to evaders from an official organization, instead of a less formal channel such as media campaigns, the intervention uses a messenger with authority. This intervention also makes use of norms by revealing the overall compliance rate to the subjects.

Legal threats are the most effective  

In the legal threat group, the proportion of people who started complying increased by 15% compared to the baseline. The survey revealed that this was due to heightened awareness of the costs of not complying. This indicates that individuals rationally adjust their compliance behavior to their perceptions of the legal consequences. This finding provides strong evidence in favor of the deterrence hypothesis. 

Moral persuasion and social norms do not increase compliance

Appealing to moral aspect did not affect compliance. This may be because the experiment only sampled those who were already not paying the license fee, and are therefore over-sampled likely to follow anti-social norms.³  For a moral appeal to work, these individuals must have first internalized norms against breaking the law.⁴ Thus, the intervention suggests that making a  moral concept more salient is ineffective when trying to increase compliance among those who are actively deviating from the law.

The letter which revealed the actual compliance rate (94%) also did not increase overall compliance, and instead had variate effects based on fee evasion rate. In municipalities where fee evasion was common this social information increased compliance. On the other hands, it decreased compliance in municipalities where evasion was rare. This shows that people adjust their compliance on the perceived compliance of others in an attempt to conform with the social norm. The key takeaway here is that when using behavioral motives as enforcement tools, policymakers need to carefully consider whether the population has a common, conflicting prior belief. If this belief differs from the intervention’s intention, the intervention may be cancelled out, and thus will not yield the behavioral changes desired. 

Subjective perceptions, behavior, and policy outcomes

The survey found that the letters caused a strong alert effect and a significant increase in the perceived detection risk. This alert, along with the reduced effort required to sign up (as each letter contained a response form), may have caused a notable increase in compliance among the mailing group relative to the non-mailing group.

• Provides novel insights about the limitations of using norms and moral appeals in law enforcement strategies. 
• Provides strong support for the deterrent hypothesis.
• Being a large-scale natural field experiment the intervention provides insights that are highly reliable for real-world interventions.

How Social Norms Complicate Behavioral Research

Our behavior is heavily influenced by the social norms we often implicitly follow. While using these social norms to change peoples’ behavior can be powerful, it is often tricky to accurately map and predict these vauge social dynamics.. This article explores the difficulties associated with such interventions and proposes solutions to mitigate them. 

Can We Design An Environment That Facilitates Honesty?

There’s no doubt that our environment can influence our decision making. Along with the elements we saw in this intervention, disorder in our environment can also muddle our  reasoning processes regarding norms and law enforcement. Understanding what causes this disorder in the environment, as well as the dynamics behind how this influences behavior, could provide key insights into how to reduce rule-breaking behavior. This article discusses a series of experiments that were conducted to test whether visual disorder affects cheating behavior.