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IFS Reports
July 2012 C125
Article
Tax and benefit policy: insights from behavioural economics
Type: IFS Reports

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Behavioural economics is increasingly being used to inform and develop policy interventions. Perhaps the most visible use of behavioural economics has been the development of 'nudge' policies, which stress that changing the way choices are presented, or changing the environment in which decisions are made, can substantially alter behaviour. However, the lessons from behavioural economics run deeper than nudging alone and have enormous implications for more traditional policy levers as well. This report highlights this point through a detailed examination of the behavioural insights for tax and benefit policy.

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IFS researchers draw together lessons from behavioural economics for tax and benefit policy in a report aimed at policymakers.