Abhijit Banerjee and Esther Duflo (J-PAL) sit with The Los Angeles Review of Books following the publication of their book ‘Good economics for hard times’.
They discuss the role of empirical research—particularly randomised controlled trials—in modern economics, as opposed to the traditional conceptual method, before calling for stronger economic “nudging” to mould people’s preferences and values against climate change.
“Progress in behavioural economics has shown that people’s ‘preferences’, particularly on topics they know little about, are largely arbitrary and very easy to influence. Similarly, as creatures of habit, we might feel much more inclined to consume less energy if we see our neighbours consuming less — and these kinds of changes can become systemic and sustainable.”