The Full English – The problem(s) with behavioural psychology/ economics

This week an article I was reading on Unherd by Stuart Ritchie, a psychologist colleague and lecturer at KCL I deeply respect (1). It threw into sharp relief why I don’t post about behavioural psychology. When I first took up this blog I expected to get into behavioural economics in a big way. I wanted to post all about the behavioural biases that we, as investors, succumb to.  Rather like the Psy-Fi blog (2). The psychological traps that we fall into, that also branch into my daily working trade. 

In researching these concepts to write about I come against a major problem. The evidence is pretty poor. At face value the biases make a lot of sense (ergo strong face validity), but many suffer from the flaws that Dr Ritchie outlines as reasons why behavioural insights and psychology don’t apply to the current COVID-19 pandemic. Alot of this comes down to the “replication crisis” that has occurred over the past decade. This has shown that many of the best known psychological results couldn’t be repeated in independent experiments. At best these studies were one-offs, they could have been selective, biased or misreported, and at worst they may be fraudulent. 

Dr Ritchie goes on to outline a number of cases where psychologists have given opinions on the current COVID-19. A lot of those opinions are based on studies produced with small numbers of university students in idealised conditions. We’re now accepting they are not generalisable to Jo Bloggs on the street: 

“So how can we be sure that the results of behavioural science experiments — even those that are based on bigger or more representative samples than 156 undergrads — are relevant to our current situation?

The answer is that we can’t. Exploring the human capacity for bias and irrationality can make for quirky, thought-provoking articles and books that make readers feel smarter (and can build towards a tentative scientific understanding of how the mind works). But when a truly dangerous disease comes along, relying on small-scale lab experiments and behavioural-economic studies results in dreadful misfires…” (1)

The problem for behavioural economics, much like COVID-19, is one of data. We have not done enough pragmatic experiments to prove that the biases talked about have the effect we say they do (in most cases). In the absence of that data expert opinion rules. COVID-19 policy is being produced by experts, using what little data they have plus a lifetime of training. Some of it will be wrong. It will be biased by whatever preconceptions those experts have. The effects of those biases are unknown. The snake eats it’s own tail.

Image Credit: Dale Hattis (3)

For COVID-19 most of what those experts have been saying is common sense. Some of it hasn’t been; David Halpern of The Behavioural Insights Team, the “Nudge Unit”, coined the phrase “herd immunity” (4). Look how that turned out. Was he, as a behavioural psychologist, the right person to be speaking as an expert on public health and infectious diseases? See how fast we have backtracked to WHO guidance. Guidance from public health experts and limited data.

In the absence of data we have expert opinion. Experts don’t want to go on record in case they what they say is wrong, and people die (for COVID-19) or lose money (for behavioural economics). In the absence of expert opinion we have a vacuum, filled by all the other opinions the unqualified and slightly informed want to share, air and discuss. 24-hour news and social media have only heightened the problem. They offer platforms for partial truths. They amplify opinion. 

I went through a phase of listening to loads of behavioural psychology talks and podcasts. They just made me angry. The information was sold as true fact. The face validity was there. There was benefit in challenging one’s own preconceptions and points of view. But where was the evidence to back up the fact claim?

I try to keep this blog evidence-based. As a doctor and a scientist I’ll only share information on COVID-19 that I think is responsible, balanced and evidence-based. I’ll only share information on behavioural psychology that I think is responsible, balanced and evidence-based. As with all science, the eternal cop-out, more data is required.

Keep handwashing, stay home and take care!

The Shrink

Thought for the week:

“There is only one way to happiness and that is to cease worrying about things which are beyond the power of our will.” – Epictetus

COVID-19:

This twitter thread from David Oliver is excellent…

 

Life goes on:

Comment/ Opinion:

It’s interesting to note that when I started this blog, the number of UK FIRE bloggers could be counted on fingers and toes. Now we’re up to the hundreds. Where blogs are repeating previous messages I won’t share them, unless they have a particularly eloquent or amusing take. I’m drafting up an RSS feed which I will inset into the website in the future. 

References:

  1. https://unherd.com/2020/03/dont-trust-the-psychologists-on-coronavirus/
  2. http://www.psyfitec.com/p/the-to-z-of-behavioral-bias.html
  3. https://www.researchgate.net/figure/Hierarchy-of-evidence-pyramid-The-pyramidal-shape-qualitatively-integrates-the-amount-of_fig1_311504831
  4. https://www.theguardian.com/world/2020/mar/13/herd-immunity-will-the-uks-coronavirus-strategy-work
  5. https://www.bbc.co.uk/news/science-environment-52113695
  6. https://uk.reuters.com/article/uk-health-coronavirus-emissions/coronavirus-could-trigger-biggest-fall-in-carbon-emissions-since-world-war-two-idUKKBN21L0KC?il=0
  7. http://www.theguardian.com/environment/2020/mar/31/trump-epa-obama-clean-car-rules-climate-change
  8. http://www.theguardian.com/technology/2020/mar/31/zoom-booms-as-demand-for-video-conferencing-tech-grows-in-coronavirus-outbreak
  9. https://www.techradar.com/news/skype-introduces-video-meetings-with-no-sign-up-needed-for-those-wanting-a-zoom-alternative
  10. https://www.theguardian.com/world/2020/apr/01/doubts-over-take-up-of-government-coronavirus-emergency-food-parcels
  11. https://www.telegraph.co.uk/global-health/science-and-disease/number-one-important-covid-19-sweeps-britain/
  12. https://www.private-eye.co.uk/news
  13. http://www.theguardian.com/science/2020/mar/30/scientists-develop-ai-that-can-turn-brain-activity-into-text
  14. https://www.thisismoney.co.uk/money/mortgageshome/article-8070359/New-cashback-scheme-help-knock-thousands-mortgage.html
  15. http://quietlysaving.co.uk/2020/04/01/march-2020-plus-other-updates/
  16. https://monevator.com/what-has-changed-and-what-has-not/
  17. https://www.mrmoneymustache.com/2020/04/02/no-you-didnt-just-lose-half-of-your-retirement-savings/
  18. https://drfire.co.uk/q1-2020-report/
  19. https://awaytoless.com/monthly-spending-march-2020/
  20. https://awaytoless.com/seeing-opportunity-in-adversity/
  21. https://thesavingninja.com/savings-report-21-m-m-m-my-corona/
  22. http://fiukmoney.co.uk/march-20-net-worth-and-monthly-update-19-501581-24317/
  23. https://igniting-fire.com/2020/04/03/2020-q1-update-coronavirus-quarantine-edition/
  24. https://pursuefire.com/monthly-update-19-march/
  25. https://www.onemillionjourney.com/income-expenses-savings-march-2020/
  26. https://obviousinvestor.com/p2p-lending-portfolio-update-for-march-2020/
  27. https://sparklebeeblog.wordpress.com/2020/04/01/monthly-update-mar-2020/
  28. https://firelifestyle.co.uk/2020/04/01/march-2020-financial-update-covid-19/
  29. https://adotium.co.uk/2020/04/01/march-2020-report/
  30. https://thesquirreler.com/2020/03/31/march-2020-net-worth-update-and-mcr-fire-meet-up-change-of-venue-now-online/
  31. https://monethalia.com/monthly-savings-report-march-2020/
  32. http://thefirestarter.co.uk/im-finally-free-sort-of-covid-19-brain-dump/
  33. https://averagemoneymanagement.wordpress.com/2020/03/31/freetrade-diary-3-march/
  34. http://www.psyfitec.com/2020/03/on-dinosaurs-and-dividends.html
  35. https://www.finumus.com/blog/shelter-in-place-your-portfolio
  36. https://www.muchmorewithless.co.uk/robo-adviser-results-nutmeg-and-wealthify-vs-vanguard-year-2/
  37. https://theescapeartist.me/2020/04/03/now-thats-what-i-call-financial-independence-20/
  38. https://simplelivingsomerset.wordpress.com/2020/04/03/developing-a-buying-policy-for-the-bear-market/
  39. https://southwalesfi.co.uk/2020/04/03/lisa-v-sipp/
  40. https://indeedably.com/misadventure/

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