Boosting and nudging: two paths toward better financial decisions

Increasingly, policymakers are using insights from psychology and behavioral economics into how people make decisions to inform evidenc-based policy interventions. To date, much of the focus has been on nudges: interventions designed to steer people in a particular direction while preserving their freedom of choice. Yet behavioral science also provides support for a distinct kind of nonfiscal, noncoercive intervention: boosts. The objective of boosts is to foster people’s competence to make their own choices. We explore various dimensions on which boosts differ from nudges, address possible misconceptions, and provide a taxonomy of boosts. We then review and outline boosts that have been proposed and designed to foster people’s competences to make sound finanical decisions.