Expanding Highly Integrative Basic And Responsive Research To Accelerate Service To Society

Behavioural Economics

The Impact of Direct Giving

The Impact of Direct Giving

Experimental evidence suggesting that unconditional cash transfers can be effective for reducing homelessness

November 2021

Homelessness is a growing social, economic, and health crisis. A research team based in Vancouver, Canada, is tackling this crisis through the New Leaf project, a HIBAR research project investigating whether unconditional cash transfers can empower people to move beyond homelessness. This innovative intervention has the potential to reduce homelessness through an agentic approach beyond the provision of emergency services such as shelters and meal programs. This project is a partnership between Foundations for Social Change, a charitable organization that develops evidence-based solutions to advance social change, and the University of British Columbia.

The New Leaf research team conducted the world’s first randomized controlled trial examining the impact of unconditional cash transfers on individuals experiencing homelessness. In this trial, they distributed a one-time unconditional cash transfer of $7,500 to each of 50 homeless individuals in Vancouver, with another group of 65 as controls. The results of the trial demonstrate that the cash transfers led to significant improvements in housing stability, food security, savings, employment, and cognitive function, with no increases in spending on temptation goods. Based on a cost-benefit analysis, the cash transfer produced $600 net savings per person per year via reduced social service use. The research findings suggest that unconditional cash transfers can be an effective solution to reduce homelessness. Preparations for an expanded trial in Vancouver and Toronto, Canada, are underway.

Webinar speakers Jiaying Zhao, Associate Professor and Canada Research Chair at the University of British Columbia, and Alice Hopkins, Program Manager at Foundations for Social Change, described how the research partnership developed and how the team applied advances in behavioural sciences, cognitive psychology, and behavioral economics to demonstrate that direct giving is an effective tool to quickly reintroduce stability into people’s lives.

Key Takeaway Messages

Co-leadership has been an essential component throughout the project.

Cross-sectoral diversity was powerfully important for conveying results to key audiences.

With good project design, academic rigor and practicality are compatible.

Read the key takeaway messages from all of our webinars here.

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Webinar Speakers

Alice Hopkins

Program Manager
Foundations for Social

Jiaying Zhao

Associate Professor and Canada Research Chair
University of British Columbia

Improving the National Flood Insurance Program

Improving the National Flood Insurance Program

How psychology and economics can be brought together to inform and drive policy

June 2021

Dr. Howard Kunreuther, from the University of Pennsylvania, spoke about how psychology and economics can be brought together to help society better manage low-probability, high-consequence events related to technological and natural hazards. Our innate human biases make it difficult for us to assess the risk of unlikely events, and it is important to understand that while we cannot prevent these biases, it is both possible and necessary to develop and implement policies that manage the risks appropriately. Dr. Kunreuther’s work has required deep and long-term collaborations with a wide range of partners, including policy makers, insurance providers, and disaster management experts.

He described the specific example of how biases related to risk assessment lead people to decide against buying flood insurance, despite living in flood-prone areas. His work has shown that a behavioral risk audit can assist in designing a strategy to both encourage property owners to purchase insurance and to invest in cost-effective measures to protect themselves against future disaster losses. This work has informed new policies recently developed by the U.S. Federal Emergency Management Agency (FEMA) and currently under debate within the U.S. Congress.

Protection against disastrous flood losses is just one example of the importance of behavioral economics in informing and driving effective policies. The current coronavirus pandemic has intensely highlighted the destructive consequences of our inability to intuitively grasp the concepts of exponential growth, and we have the opportunity to learn from this pandemic experience to address the exponentially growing threat of climate change. Dr. Kunreuther briefly described how society’s response to exponential growth processes, whether or not we are able to recognize them, needs to be swift and aggressive, and co-led, use-inspired basic (HIBAR) research is at the center of this work.

Howard Kunreuther was co-director of the Wharton Risk Management and Decision Processes Center at the University of Pennsylvania and co-author, with Robert Meyer, of The Ostrich Paradox: Why We Underprepare for Disasters (Wharton School Press, 2017).

Key Takeaway Messages

Take the time to learn what is truly of interest to potential research partners.

Anecdotes and stories can be powerful for motivating people in various ways.

Develop guiding principles and a broad framework for your work.

Read the key takeaway messages from all of our webinars here.

Watch the full webinar recording

Watch key excerpts from the webinar

Webinar Speaker

Dr. Howard Kunreuther

University of Pennsylvania