As one of the last posts this year, we’re featuring our 28th Research Hero: professor Shlomo Benartzi from UCLA Anderson School of Management, a leading authority on behavioral finance with a special interest in household finance and participant behavior in retirement savings plans. His most significant research contribution is the co-development of Save More Tomorrow (with Richard Thaler), a behavioral prescription designed to help employees increase their savings rates gradually over time. Professor Benartzi has also supplemented his academic research with both policy work and practical experience through advising government agencies in the U.S. and abroad as well as helping to craft numerous legislative efforts and pension reforms. In addition, he has also worked with many financial institutions as an academic advisor. His latest initiative is Digitai.org where he’s exploring new digital interventions that will help consumers, businesses and policymakers leverage behavioral research.
I wish someone had told me at the beginning of my career… that you should only do research you are really passionate about. Research often requires years and years of sustained effort, so unless you have a passion for these ideas, then you will almost certainly give up. (It’s like a marriage in that sense.) There’s also something magical that happens when you are passionate about the research. Not only is the work more fun, but it somehow gets published. Don’t ask me how it happens.
I most admire academically… I’m going to cheat and give you three names. The first person is Danny Kahneman. Not only is he super brilliant, but he’s also very insightful about questions outside his area of expertise. He never gives in to pressure, and always does what he thinks is right academically. Richard Thaler I admire for the diversity of his research program, and also his ability to see the big picture. John Payne is incredibly humble, yet an unusually deep thinker.
The project that I’m most proud of is… Save More Tomorrow, a little idea Thaler and I came up with that led more than 4 million people to double their savings rate. We weren’t particularly brilliant, but we were persistent and with a bit of luck we made a big difference.
The one project that I should never had done… I’m still trying to forget that.
The most amazing or memorable experience when I was doing research… I was salsa dancing at the boathouse in Santa Monica and chatted with my friend Brian Tarbox who worked in the finance industry. I told him about my idea for Save More Tomorrow; I didn’t even think he was listening. Several years later I hear from him again and he hands over an excel spreadsheet with all the data. He said I have some good news: I tried out the Save More Tomorrow idea and it works. Your program quadrupled the savings rate of these low-income people.
The one story I always wanted to tell but never had a chance… what I’d really love to do is follow-up with those people in Brian’s spreadsheet. The company insisted on being anonymous, and Brian passed away, but I’d love to know how those individuals are doing now. Are they still saving more? Have they managed to retire with dignity?
A research project I wish I had done… I had this hunch that automatic enrolment in a retirement savings plan would get a lot more people to start saving, but that it might also lead to a decrease in aggregate savings, since the default saving rate is typically very low, often around 3 percent. I wanted to test out my hunch, but Brigitte Madrian tested it out first and did a superb job.
If I wasn’t doing this, I would be… an unhappy architect. I love good architecture, but if it was my profession then it would no longer be a fun hobby. I would have to pay the bills and deal with clients.
The biggest challenge for our field in the next 10 years… is increasing our impact. How do we take these proven behavioral insights and scale them up? How do we solve big societal problems around health care or retirement savings or education? In my future work, I’m going to explore how we can use the digital revolution to accelerate the pace of change. With digitai.org, I want to test out new digital interventions that will help consumers, businesses and policymakers leverage all of this new research. I think that smartphone in your pocket represents a tremendous opportunity to help people think better and make better choices, but we have to get it right.
My advice for young researchers at the start of their career is… not to listen to me! Every young researcher needs to tailor their journey to their particular set of skills, interests and weaknesses. Find your own passion. Don’t follow mine.
:InDecision: 