Reverse Prostitution: cognitive biases and conditional cash transfers

Stuart Rennie writes a thoughtful blog on, Can
you buy changes in health behaviours?
on how the World Bank backs an anti-AIDS experiment paying
young people to not contract sexually transmitted infections
. The basic idea is not new, conditional cash transfer
programs in poor countries have had successes in improving health and education
but applying it to sexual health moves it into more
controversial territory. Is there anything wrong with “reverse prostitution”?

A FT editorial wonders if "Are the funders saying young Tanzanians
cannot be trusted to do what is good for them without a bribe?"

The overwhelming evidence unfortunately seems to be that
humans are not great at doing what is good for them. In an unsettling
review Christopher K. Hsee and Reid Hastie (Decision and experience: why don’t we choose what makes us
Trends in Cognitive Sciences, Vol 10:1 31-37, January 2006) show that in many situations we systematically fail to
predict what maximizes our happiness. Worse, even when we have an accurate idea
of what makes us happy we still might not do it.

In particular we are bad at predicting how we will feel in a
future state we are not in right now – our thinking is quite
different when we are dispassionately discussing health, when we are
sexually aroused or when discovering we have been infected with something. We rationalize past actions and persist in maladaptive
behaviours to retain internal consistency. We are also often impulsive,
foregoing later big rewards for smaller present rewards.

However, economic incentives can actually make use of some
of these biases. "Lay economism", a tendency to base
decisions on financial aspects of a decision rather than happiness aspects, supports conditional
cash transfers. If there is a medium such as money in a decision people
often maximize the medium rather than expected happiness
. Biases that often works against human happiness can be
made to support rational behaviour (and indirectly, happiness).

If there is anything economists like to point out, it is
that people respond to incentives. Non-economists often regard incentives as a form of
coercion: are not these poor people coerced into behaving in a certain way
by being offered something valuable? However, that requires
stretching the concept of coercion far outside its normal use as compelling
people to behave in a certain way using threats of some form of harm.
In a coercive situation an outside agent restricts our range of
options by making some impossible, or adds strong disincentives to
options we would otherwise want to make. Adding value to certain
options is not coercive: we can still choose to ignore the difference or
not take the added value (while the coercive reduction cannot be foregone
if we wish). There might be an element of opportunity cost in the incentive situation that reduces the value of the options
because of regret over the options not chosen, but in the case of
preventing the spread of a lethal disease the regrets caused by the
program appear quite small compared to the gains if it prevents the spread. Yet it is likely that people to some degree will
notice their regrets more than their health, and not see the true benefit they
have gained.

Another criticism against the program might be that it, just
like prostitution, commoditizes people or behaviours. But
fighting STDs tends to medicalize sexuality (unless it is done from a moralistic perspective – in which case it often becomes guilt-ridden). In
both cases social values may be replaced by economical or rational
values, but the good of avoiding the STD is sizeable and may overrule them. A more
psychological problem is that the program could replace the internal motivator to
keep healthy with an external motivator, making people dependent
on outside support for what was previously a natural behaviour. These
concerns cannot be judged theoretically, they have to be studied
empirically among real people in a real culture. Past experience shows that it is likely that the
program needs to be shaped to fit in and that we may discover
unexpected side-effects of apparently simple incentives.

There are many ways this project may fail, but the most
likely is through unwise outside criticism before the facts are in, making the World Bank discontinue it. The project
challenges many moral intuitions (that good people naturally will do what is
good for them, that paying for something is bad or makes it bad) and
sacred values (that sex and health do not mix with money). But these moral intuitions and values likely biased. Even if they were entirely due to rational thinking rather
than emerging from shared cultural outlooks and evolutionary
quirks of our brains they would still be built on fallible human thinking.
The only way we can check whether we are correct is to test them, and for that
the project needs to go on.

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