A recent visit to the supermarket turned out to be a rather eventful one. While I went there to stock up on provisions, I found a particular aisle to be more crowded than the rest. Intrigued, I went to check and found two festival hampers for Diwali stacked side by side. But, surprisingly, one stack kept going down while the other stayed the same. I was curious to know why people preferred one over the other. The answer turned out to be simple - the fast-moving one was labelled a limited-edition pack, while the other looked ordinary.
Unravelling the psychology behind people’s decisions, combined with the economic principles that guide them, essentially forms behavioural economics.
Who is a behavioural economist?
Behavioural economics is a field of study that involves observing and analysing real-world human behaviour. It thrives on posing the right questions and identifying the right solutions through experiments. A key difference between conventional economics and this field is that it acknowledges that humans can be influenced by emotions, impulses and their surroundings. A behavioural economist is one who combines these elements to grasp why people behave the way they do in real life and how.
What are the responsibilities of a behavioural economist?
Typically, the responsibilities of a behavioural economist include:
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They recognise trends and patterns in a dataset, which they must put to use by making predictions and building strategies.
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They are responsible for creating policies that benefit the economy holistically, while recognising potential challenges and designing solutions accordingly.
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They must adapt to the evolving economic and market conditions.
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They must be able to think creatively and identify opportunities through a broad, strategic perspective.
They must be able to work in close collaboration with economists, government officials and business leaders in order to develop economic policies and must be able to interpret economic data to others.
What are the skills required to become a behavioural economist?
Typically, the following skills are required for a behavioural economist:
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Experimentation
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Coding
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Curiosity
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Empathy
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Teamwork
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Communication skills
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Design
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Quantitative and analytical skills
What are the associated entrance exams?
To become a Behavioural Economist, you will need a bachelor’s degree in Economics, Psychology, Behavioural Science, or related fields such as Statistics or Data Analytics.
In India, undergraduate entrance exams include CUET, IPU CET, Christ University Entrance Test, and other state-level or university-specific exams for economics or social sciences programs.
For postgraduate studies such as an M.A./M.Sc. in Behavioural Economics, Behavioural Science or Economics. The first two are less common in India, whereas the third is a relatively conventional pathway. Exams like CUET-PG, TISSNET, JNU Entrance Exam, or university-specific tests may be required. Candidates aiming for MBA programs with behavioural or consumer insights specialisation can take exams like CAT, XAT, CMAT, NMAT or GMAT.
For studying abroad, SAT/ACT is required for undergraduate programs, GRE/GMAT for postgraduate programs, and IELTS/TOEFL to demonstrate English proficiency.
Which are the top colleges in India for studying Behavioural Economics (as per NIRF rankings)?
While a few colleges in India offer a dedicated degree in Behavioural Economics, students can pursue Economics, Psychology or Data Analytics and later specialise in this field. Based on NIRF rankings, leading institutions include Hindu College, New Delhi, St. Stephen’s College, LSR, Miranda House, Kirori Mal College, MCC and Loyola College. These institutions provide strong programs in economics and behavioural sciences, offering a solid foundation for careers in behavioural research, consulting, and policymaking. IIM Ahmedabad and Bangalore have courses on behavioural economics, as well.
What is the growth trajectory in this field?
The growth in this field starts from the junior level and ends at the director level. The hierarchy is as follows:
Junior Behavioural Economist/Research Associate
They deal with data collection, analysis and experimentation. At this level, they may collaborate with universities or consulting firms to test various hypotheses and derive insights.
Behavioural Economist/Policy Analyst
At this stage, they work on independent projects and contribute to corporate strategy or policy design. They apply behavioural insights to refine decision-making for consumers and improve outcomes for public policy. They will also be expected to partner with data scientists, policy makers or psychologists, if the need arises.
Senior Behavioural Economist/Behavioural Insights Lead
They supervise research teams and large-scale studies and translate the behavioural findings into strategic recommendations. They could also serve as heads of behavioural insights departments in government institutions, global bodies or MNCs, thereby influencing decision-making at the organisational or national level.
Director/Chief Behavioural Officer
They focus on incorporating behavioural science deeply into the organisational goals. They also advise government leaders or senior executives. They spearhead policy innovation labs and design large-scale interventions that align human behaviour with economic design.
What is the expected salary in this field?
Entry-level behavioural economists in India can expect a salary of INR 6-10 lakhs per annum, depending on whether they work in academia, research, consulting, or corporate roles. With experience and specialisation, this can rise to INR 12-25 lakhs, and over INR 30 lakhs in senior or policy advisory positions, particularly in consulting firms, government think tanks, or multinational organisations.
In terms of USD, starting salaries typically range between USD 55k– 75k annually, rising to USD 80k-120k for experienced professionals or those in senior research or behavioural strategy roles. It can cross USD 130k for very senior roles.
Organisations that commonly hire behavioural economists include NITI Aayog, World Bank, UNDP, Deloitte, PwC, EY, KPMG, Google, Microsoft, and major policy research institutes such as the National Council of Applied Economic Research (NCAER).
Who are the top role models in this field?
The most remarkable personalities in this field are Dr Daniel Kahneman (late), Dr Richard H. Thaler, Dr Cass R. Sunstein, and Dr Dan Ariely. Prominent contributors and thought leaders across the world also include Dr Sendhil Mullainathan, Dr George Loewenstein, and Dr Amos Tversky (late). They have collectively advanced our understanding of how psychology influences economic decisions and have shaped public policy, consumer behaviour, and market design through their groundbreaking research.
In essence, behavioural economics reminds us that humans are not always rational decision-makers - we are driven by perceptions, emotions, and subtle cues that often escape our awareness. By combining insights from psychology and economics, this field helps decode those everyday choices, from shopping habits to financial planning and policymaking. As the world increasingly values data-driven yet human-centred thinking, behavioural economics stands out as a discipline that bridges both logic and instinct, shaping smarter decisions for individuals, businesses, and societies alike.
