1. Behavioral Economics and the Bay - An Exploratory Workshop Presentation to the Citizens Advisory Committee NOVEMBER 20, 2014

2. Planning Committee and Attendees Planning Committee Charlie Abdalla, Committee Chair, Penn State University Susan Julius, EPA Office of Research and Development Matt Ellis, Chesapeake Research Consortium Poornima Madhavan, National Academy of Sciences Jim Pease, Virginia Tech Marc Ribaudo, USDA-Economic Research Service Kurt Stephenson, Virginia Tech Lisa Wainger, University of Maryland Presenters / Attendees Jamie Baxter, Chesapeake Bay Trust Dana Archer Dolan, George Mason University School of Public Policy Suzanne Etgen, Watershed Stewards Academy, Arlington Echo Outdoor Education Center Lamonte Garber, Stroud Water Research Center David Just, Professor, Cornell University Sarah Lynch, Director, World Wildlife Fund Laura McCann, University of Missouri Kent Messer, University of Delaware Amanda Pruzinsky, Chesapeake Research Consortium, Inc. Ann Sorensen, American Farmland Trust Lauren Taneyhill, Chesapeake Research Consortium, Inc.

3. Workshop Goals  Broaden knowledge of behavioral economics and potential for applications in the Bay  Explore application to specific problem areas:  non-point source agricultural pollution  household/homeowner land and water management  Increase knowledge exchange and expand collaboration among practitioners and researchers to address Bay-specific policy challenges  Identify and prioritize follow-up strategies for extending insights from the workshop  Communicate this knowledge to state and EPA policymakers and other key audiences

4. Definition of Behavioral Economics (BE) "Behavioral economics is…the intersection of economics and psychology.” Traditional economic theory assumes that people are rational and make choices that maximize their happiness. vs. Behavioral economic theory accounts for nonrational behavior, (e.g., procrastination, imperfect information, inherent psychological biases) that do not always make people good decision-makers Adapted from Jodi Beggs (http://economics.about.com)

5. Example of BE Research Results Research focuses on discovering how choices/decisions can be influenced by relatively subtle changes in framing or phrasing (Just, 2014). One example from the workshop was: Healthy Lunches: Research uncovered factors that influence high school students’ lunch food choices. To promote healthy choices, changes were made to placement and presentation of food: Healthy choices were placed within easy reach while unhealthy choices were moved outside of an easy reach. A healthy entrée, a bean burrito, was renamed to make it sound more exciting. Some healthy choices were more attractively displayed and available near the cashier. Changes resulted in many more students selecting healthier foods for lunch. Careful selection of the ways in which choices were presented improved the students’ food decisions without limiting what was available.

6. Workshop Details  Held August 27-28 at SYSNC (Annapolis)  17 participated  Keynote speaker was: David Just, Cornell University  Participants were from: Federal Agencies, NGOs (Arlington Echo Outdoor Education Center, Stroud Water Center, American Farmland Trust, Chesapeake Bay Trust), Universities (U. of Missouri, U. of Delaware, George Mason U.)  Breakout sessions explored:  Areas of greatest need related to individual decisions that cause water quality problems  Situations (decision-making contexts) that have the greatest potential for applications of behavioral economics in the Bay watershed  Recommendations for how to stimulate greater applied research and action on the above identified high- priority topics?  Potential recipients of the report and recommendations, and how the report’s messages should be conveyed  Conducted workshop evaluation

7. Research Recommendations Motivation for behaviors that can inform on Bay outreach and engagement programs Efficacy of programs geared toward informing homeowners about actions and links to the Bay Methods to account for BMP implementation by home owners. Methods to embed stewardship and water quality improvements into farmers’ social identity Methods to cultivate peer pressure related to stewardship to encourage change. Effective visual demonstrations / techniques that encourage behavioral change among various communities. Information that would motivate farmers to increase their participation in conservation programs. Collaborative learning communities that identify opportunities and refine implementation approaches related to behavior change, e.g.: Partnerships between practitioners and academics for mutual learning experiences and information exchange to support behavioral change programs that address on-the-ground implementation challenges.

8. Workshop Goals were Met The workshop was effective in Broadening knowledge of behavioral economics and how this field might be applied in the Chesapeake Bay watershed. facilitating an in-depth exploration of the potential application of behavioral economics to non-point source agricultural pollution or household/homeowner land and water management. identifying and prioritizing follow-up strategies that will serve to extend insights beyond the attendees to the larger community of researchers and regulators/policymakers. BE research is already underway in the Bay Such efforts represent learning opportunities for organizations and individuals that could apply those same techniques in other places. A database of such efforts, including key characteristics of the environmental problem and solution, is being developed and will facilitate learning and expansion of the application of behavioral sciences to environmental problems in the Bay. The STAC will look for opportunities to contribute to this research for issues specific to the Bay