COVID-19 has wreaked havoc across India, which was shaken up by the misery and hardship of the migrant crisis. It has pushed several into poverty, hunger, and homelessness. The household savings rate is one of the economic questions we need to ask at this point. We attempt to address this last question in the ensuing discussion. Are households saving enough to insulate themselves against shocks such as COVID-19 epidemics? Have they got the means to save? Nudge theory’s implementation can be a boon to the vaccination drive and the Indian economy.
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What is Nudge Theory?
Nudge Theory describes the concept of pushing people to make decisions with an approach laced with critical thinking. The theory explores the factors that influence people’s action and behaviours to leverage it to help them make decisions.
It is one aspect of how behavioural science can be applied in the public sector. It comes into play, specifically around choices people have to make.
As said, “By knowing how people think, we can make it easier for them to choose what is best for them, their families and society,” in the book ‘Nudge: Improving Decisions About Health, Wealth, and Happiness‘ which was published in 2008, written by Cass Sunstein and Richard Thaler.
Application of Nudge Theory by Indian Government Earlier
The Indian Government has recognised the relevance of behavioural insights in its Economic Survey released on 4 July 2019. The policy chapter describes how Government used behavioural insights to implement schemes like the Swacch Bharat Abhiyan and Beti Bachao Beti Padhao.
Implementation of Nudge Theory in COVID-19 Vaccine campaign
However, increased vaccination rates can create an ambiguous effect and social dilemma that can increase the free-rider problem due to vaccination’s costs and risks. It is imperative for the government to address false skepticism about vaccine uptake when dealing with a novel vaccine.
Vaccine skepticism can also develop due to several reasons, such as a lack of familiarity and misinformation. With the spread of fake news and misinformation in the post-truth era, vaccine mistrust has gained momentum throughout the world. Vaccine dubiousness is often rooted in anti-vaxxers and conspiracy theories.
The global goal for the year 2021 is to reduce the number of preventable diseases. Vaccination against preventable diseases benefits both vaccinated people and the unvaccinated indirectly. Vaccination contributes to the achievement of 14 out of the 17 Sustainable Development Goals, including good health, no poverty, reducing inequalities, decent work, and economic growth.
Nudge for a Successful Vaccination Drive to Revive the Economy
Social nudges are a policy intervention designed to change human behaviour without limiting freedom of choice predictably. Behavioural sciences can understand the reasons for vaccine refusal or uptake. Social nudges, usually in the form of individual incentives, have been used in many instances. Vaccination should be made as seamless and available as possible.
When a vaccine is available, people will start shifting from a negative to a positive outlook, further changing their overall sentiments towards economic growth. When people’s sentiments lift, they become more lenient with their spending, leading to increased GDP. Once consumption starts occurring, and the demand stabilises, the economy will improve, and investments will flow in as a result.
This is a Guest Post by Shivangini, who is a Journalist, studying her Masters from the Indian Institute of Mass Communication, New Delhi. She has an avid reader and has worked as a journalist in the past. She is a storyteller and a writer who loves to explore the intricacies of writing. Her website can be found here.
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