Implications of research on the economy

• Implications refers to how psychological research influences, affect, benefits or devalues our economic prosperity
• Psychopathology:

  • CBT targets root causes of disorders making it a long term solution - saves money
  • NHS saves money by preventing further treatment
• Memory:

  • cognitive interviews increases EWT accuracy, allows for better use of police time, resources and public money
• Attachment:

  • stay at home mothers don't work and contribute to taxes
  • Mothers are able to work, adding to the workforce and contributing to the economy through taxes
  • Securely attached children are more productive and contribute more to the economy, don't need support from the government
• Economy- concerns the production, distribution and consumption of good and services
• Psychology can contribute to the public good and a better economy
• Behavioural economics researches how people make decisions
• Humans are irrational thinkers and can be manipulated for the better
• Availability heuristic


  The rule that the likelihood of selecting something is related to its availability
• Example of availability heuristic


  • People overestimate the likelihood of plane crashes
  • This is because we the news talks about every plane crash
• The framing effect


  • People's decisions differ depending on whether a choice is presented as a gain or a loss
• When participants were asked to choose between 2 treatments that would be life saving for 600 patients

  • 72% chose treatment A when it was framed positively
  • 22% chose treatment A when it was framed negatively
• The nudge unit

  • Behavioural Insights Team in the UK government
• The nudge unit applies behavioural economics to try and improve government policy and to save the UK government money