Current policies lack in effectively targeting both contextual and psychological barriers for low-income individuals. This includes making public transportation affordable or having programs that promote adequate financial cushion. By innovating an behaviorally-inspired intervention that targets context (transit cost barriers) and psychological stress (caused by lack of savings and chronic debt), it may lead to better opportunities, improved financial health, and ultimately enhanced psychological well-being.

The Problem

The policy issue regards missed opportunities for low-income individuals due to the cost of public transportation and financial programs that do not effectively address psychological biases and

promote financial cushion. The poor often engage in behaviors that further reinforce poverty circumstances due to scarcity-driven mindsets that lead to suboptimal decisions. High poverty rates

are correlated with lower levels of car ownership, thus people in poverty have an increased reliance on public transportation.

The Solution 

The proposed intervention is the More Opportunities, Rides, and Earnings (MORE) program. It features subsidized transit fares, facilitated savings, and text reminders about financial progress, which are designed to target present bias, risk aversion, and limited cognitive bandwidth. The design targets low-income individuals situated in Cleveland, Ohio and will partner with the Greater Cleveland Regional Transit Authority (GCRTA) and local government. Making transportation accessible can increase opportunities, quality of life, and economic efficiency. Many factors contribute to increased quality of life such as employment, healthcare, and education, where one must commute to benefit from these opportunities. Thus, the policy action should address transit cost barriers to increase access to these opportunities that contribute to quality of life. Additionally, accrued savings from the subsidized fare will increase ability to pay debt. By subsidizing fare and facilitating savings, it may increase psychological well-being for individuals. The intervention cultivates independence, reduces need for dependence on welfare programs, and brings long-term impact with high economic returns. Through improving access to opportunities and financial health, the expected outcomes may outweigh the short-term costs.

High Level Goals

• Leverage research insights to diagnose problem at hand

• Propose detailed plan for testing hypotheses, addressing limitations, and scaling intervention

• Literature review - I want to collect more data about the behavioral barriers for low-income populations 

• And then synthesize the insights from literature review and other secondary sources

Those without a bank account will use a virtual account that links the ridership to the welfare website which accrues the savings values.

The system will be called the Saved, Accrued, Virtualized Earnings (SAVE) Account

The system summarizes the monetary value of the savings in a virtual manner

• In order to be eligible for the MORE program, participants will meet the income requirements established for welfare benefits. They will be recruited from a pool of eligible welfare recipients. 

• The study will use a between-subjects design where participants will be randomly assigned to a control and treatment group. The treatment condition will have the subsidized fare, savings feature, weekly messages, and monthly messages. 

• The actual intervention will take 3 months to better account for participants’ varying lifestyles and routines. 

• Differences of the outcome variables will be measured before, during, and after the intervention with 5 questionnaires.

• The study will use a within-subjects design, where different treatment conditions are applied throughout to better assess the effect of the different intervention features.

• Differences in ridership, financial health, and overall well-being between treatment and control will be measured to see if it is significant.

Some limitations include, participants not having a bank account, encouraging participants to pay off their debt, and possible budget constraints. The intervention addresses these concerns through the uniquely developed SAVE virtual account system, text reminders, and testing different conditions to see which has a higher impact in order to create a cost-effective solution.

Overall, long-term economic return should be higher than short-term cost, with opportunities leading to employment and reduced need for welfare 

Affordable transportation can increase trips for work, education, and health-related purposes. Thus, the subsidized fare is likely to increase ridership and commutes.

H1: Reducing the transit cost will result in increased ridership and commutes to more beneficial opportunities.

Increased savings provides additional financial cushion and can be utilized to pay off debt and expenses . Potential results include increased savings rate and better debt payoff compared to pre-intervention. 

H2: Money saved from the subsidized fare increases the savings rate.

H3: Money saved from the subsidized fare encourages better debt payoff and debt-to-income ratio.

Lastly, studies have shown that savings can provide financial cushion and reduce psychological stress. Thus, the increased savings and opportunities gained may facilitate individual well-being.

H4: The increased ridership, accumulated savings from the transit fare, and better management of debt will increase overall well-being.

The intervention examines whether subsidizing transit fare can increase opportunities, facilitating savings will improve financial health, and whether both can contribute to overall well-being. The intervention reduces transit costs and financial stress by targeting both contextual and behavioral barriers.

Overall, the intervention is promising for enhancing opportunities and financial health for low-income individuals. It brings a high economic return, long-term impact, and indirectly improves quality of life. The expected outcomes outweigh the short-term costs and through implementing the MORE program, hopefully MORE will come.