Human beings are more complicated than early economists like to believe, and they make economic decisions based on factors that don’t necessarily boil down to money, argues Prof Martine Visser from the Environmental Policy Research Unit (EPRU) at the University of Cape Town (UCT).
‘Neo-classical economics is based on the premise that people are selfish, and rational,’ she says, over a steaming cappuccino in the cafeteria of the University of Cape Town’s School of Economics.
Visser is a newly-minted professor at EPRU at the age of just 44, where she now takes a research focus in the ‘nexus’ where poverty, inequality, sustainable development and issues of the environment intersect.
Having achieved full professorship early in 2015, she is also a research chair of the African Climate & Development Initiative (ACDI), an extensive inter-disciplinary research and training collaboration at UCT focusing on climate change.
Reflecting on how she came to be here, Visser considers what intrigues her so much about this field of thinking.
‘The discipline of behavioural economics challenges this idea that we’re selfish and rational. It maintains that there are other reasons driving people’s behaviour, social norms and preferences, like trust, reciprocity, risk avoidance and inequality aversion,’ she explains.
People make decisions that might appear to be economically costly to them, but where the value is found elsewhere, such as in building social networks and social cohesion, which don’t necessarily come with an obvious price tag.
Growing up on a citrus farm in the Cederberg mountains, about three hours’ drive from Cape Town, Visser says as a youngster she was keenly aware of how people need to use and manage natural resources and also the complexities stemming from inequality and limited access to resources. It tuned her in to the dynamics of poverty and inequality.
Today she operates in a space where few people in the field of economics take a cross-disciplinary approach using quantitative and qualitative routes of enquiry.
‘It’s important, when linking issues of environment and sustainable development, and trying to tackle poverty and inequality, that we approach it in an integrated way taking into account the natural environment and its constraints, as well as, the behaviour and attitudes of those using resources, but also the formal and social institutions that guides their behaviour.’
How this translates into her own work, is that she travels into the field to work with communities to test how behavioural economics theories translate into real-life applicable projects. This allows her to get away from her desk and work in communities, across multiple projects.
‘I’m able to do experiments in the field, for instance with small scale farmers or fish communities or municipalities.’
In one current project, Visser and her collaborators are working with the national electricity utility, ESKOM, to improve the design of its billing system so that consumers can better understand their energy consumption. In another large project with the City of Cape Town she and her team are using behavioural nudges to affect household water savings, drawing on social norms and loss aversion.
She is also part of a team that recently started a social experiment in the town of Piketberg outside Cape Town, where they launched a complementary currency - an in-community cash system - called the Brand, or the Berg River Rand. Complementary currencies like this are a way for cash-poor communities to trade their skills and excess products with others in the community in innovative ways, while building trust and social networks, and can help stimulate business.
‘It’s exciting working on the interface between rigorous academics and applied work. And it’s exciting working with people in the real world.’
Visser completed her doctorate through the University of Gothenburg in Sweden in 2007, before taking her research position at the School of Economics at UCT. She is part of a growing network of doctoral graduates from the Gothenburg programme who are funded by the Swedish International Development Corporation (SIDA) and are now Research Fellows and Associates of the Environment for Development Initiative. She is the first to achieve full professorship.
To read more about Visser’s research.