A strong sense of scepticism, a deep curiosity about the world: An Interview with Rafael Batista

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Behavioural Economics is a rapidly expanding field with new research being developed and tested every day across academia, financial organisations, development agencies, government ‘nudge’ units and more. This series (a collaboration between myself and Merle van den Akker) features 12 behavioural economists and behavioural scientists whose work and research is at the forefront of the field. My first interview is with Rafael Batista.


Rafael Batista is a behavioural scientist who has spent his career developing and applying behavioural science research in the development and financial wellbeing contexts. He spent 3 years as a Senior Behavioural Economist at the Commonwealth Bank of Australia (CBA) where he established a Behavioural Research unit within the wider Behavioural Economics team--spearheading world-leading research with academic partners, on uplifting the financial wellbeing of Australians. He has also worked as an Associate at the Busara Center for Behavioral Economics, where he managed a series of projects to understand the psychology of poverty and how people make decisions when faced with financial scarcity. 

Applied behavioural scientists can sometimes drift from the ethos of the science, straying into ‘nudge’ territory wherein lists of biases and fallacies are liberally sprinkled around intuition-based recommendations and labelled ‘behavioural science.’ If you’ve ever worked (or gotten into a twitter ‘conversation’) with Rafael, you understand his passion for behavioural science, and more importantly, dedication to upholding a high standard for intellectual engagement, basing behavioural science outputs in rigorous experimentation, backed by equally rigorous academic evidence. 

Below, Rafael touches on his accomplishments, how he applies behavioural science in his personal life, and expectations for the future of behavioural economics & behavioural science. 
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Etinosa: What is the accomplishment you are proudest of as a Behavioural economist?
Rafael: I'm proud to have played a small role in setting up both the Busara Center for Behavioral Economics, a not-for-profit consultancy focused on applying behavioural science to alleviate poverty in emerging markets, and the Behavioural Economics team at the Commonwealth Bank of Australia.  While the roles had drastic differences, in each I was able to spend time thinking about how to do rigorous, empirical research in the industry--many behavioural economics consulting groups are consumers of the research but often don't get the buy-in to produce. I'd like to see more practitioners in the industry be producers of research. Both these organizations are exemplars for what that looks like. We haven't reached a scalable model yet, but we're getting pretty darn close. 


Etinosa: If you weren’t a behavioural economist, what would you be doing?
Rafael: No clue. For a long time, since the start of high school, I was set on becoming a lawyer, or working in the public sector, perhaps the State Department or on political campaigns. I started off as a Political Science & International Affairs double major in college, but (ironically) swapped political science for psychology because I felt there was too much research. As a psych major I learned that I love research. I kept my International Affairs degree, with a concentration in Economics. So it all worked out. 
Today, knowing myself a bit better, if I was to leave behavioural economics for something totally different, I imagine myself trying my hand at journalism or something to do with English literature. There's an MPhil course at Cambridge University which I consider from time to time, on 'Criticism and Culture.' Maybe one day I'll give it a go. 


Etinosa: How do you apply behavioural economics in your personal life?
Rafael: It’s hard to keep track. I often catch myself using decision rules which I've set up for myself to save time trying to reason through decisions. Sometimes on small things, such as before I ask a store clerk to look up the price of an item, I'll quickly ask myself what my Willingness to Pay (WTP) is and if the price [of the item] in fact is lower than my WTP, then I make the purchase, otherwise I leave it behind. 
Another example is deciding whether to Uber or take public transport or walk. If Uber cuts my travel time by half then I'll Uber; if public transport cuts the time it would take to walk by half, then I'll take public transportI cancel subscriptions immediately after subscribing, forcing myself to opt-into another month or year, rather than having to remember to opt-out. 
I set 'away' emails while I'm still in the office, informing those who want to get in touch that I am only checking emails during a certain time and if they need to reach me urgently, they can dial my number (small friction cost). I turn on price alerts for flights early, in order to sufficiently sample the prices before selecting what I believe to be a 'good' deal. 
I invest in mutual funds rather than individual stocks because I don't trust my judgment on these things and I prefer to use robo-advisors because there's limited evidence on the efficacy of human advisors (certainly not enough to justify the cost difference). I generally don't purchase extended warranties or product-specific insurance.  
These are just a few off the top of my head. 


Etinosa: In your experience, what skills would you say are needed to be a behavioural economist? Are there any recommendations you would make?
Rafael: It depends. I'll speak to being a behavioural economist practitioner since that's where most of my experience has come from. 
You need impeccable critical thinking skills. What this looks like in practice is a strong sense of scepticism to just about everything, coupled with a deep curiosity about the world, but specifically towards everyday behaviours. 
It's important to have a solid foundation in statistics. The basics are non-negotiable in my opinion, because without it you'll struggle to understand the nuance in the insights. 
Finally, it helps to know a bit about psychology and a bit about economics. I say this, not because I believe it's a requirement--it certainly isn't when you're starting off, but much of the work lies being able to find existing research in these fields, and without knowing where to start looking or how to read the papers, the job becomes immensely cumbersome. 


Etinosa: How do you think behavioural economics will develop in the next 10 years?
Rafael: To date, we have not yet seen many studies that explore effects of interventions at the individual level. When we read about a specific bias or effect, we're typically reading about the results on average, within a sample. So we may find that people are loss averse, for example, but does that mean that all people are loss averse or is it that on average people are loss averse even though some individuals are systematically indifferent? And if the latter, who are those people? I think there's a lot of work to be done to understand heterogenous effects of both existing and new behavioural interventions.

Something similar can be said for understanding the conditions in which interventions are expected to work. Everyone in this space knows that context matters. Yet, many papers forget to include this caveat when summarizing their results. We're later surprised when an intervention doesn't work the way we expected it to. Behavioural economics has taken on the tradition of social psychology whereby it does a great job of putting forward theories that explain a behavioural phenomenon. The field struggles, I feel, when it comes to predicting behaviours when you tweak the parameters. 

Which leads to my last point, I expect we'll see a lot more at the intersection of behavioural economics and machine learning. This may have many flavours; for example, we may see machine learning becoming another analytical tool enabling researchers to explore thought through natural language processing. Or it may be used to maximize the efficacy of interventions through better targeting. There are many ways in which this could evolve, so it's hard to say what exactly it'll look like, but I think the field should pay close attention to what is happening in the algorithm literature. 

Thanks for your thoughts, Rafael! Readers, you can find Rafael on Twitter, and LinkedIn.  If you would like to get the academic perspective on behavioural science and behavioural economics, see interviews by Merle


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