Societal and economic behaviour encompasses how individuals and groups make choices based on society’s existing social influences and economic choice factors. It includes economics, psychology, sociology and culture to ascertain why people spend, save, work and consume as they do—not only rationally but emotionally and socially. 

Conventional economics assumes people make rational and logical decisions to maximise their benefit, but our decisions are made under many influences: habits; social norms; social pressures - including those from friends, family, and retailers; advertisements; fear and anxiety about missing out; and innate biases of which we may not even consciously be aware. Societal and economic behaviour studies those influences to identify why people may overspend on fashionable luxury products, procrastinate saving for retirement, or consciously incur expenses to keep up with trends and fads. 

The academic field of societal and economic behaviour studies questions like: why do people choose immediate and short-term rewards instead of taking the larger long-term rewards? or how does a sense of inequality impact motivation, trust and confidence for individuals and communities? What informs one community to support the use of public health measures while another community resists? How do social norms impact people's engagement with work, education and/or the environment?

Insights from this research can be used by both governments and businesses in better policy and product design. For example, "nudges" (small changes or "framing" in how choices are presented) can nudge people to eat healthier, to save more or to behave in a more environmentally friendly way without removing their freedoms. Insights into behaviour can also help make welfare systems, tax policies and marketing more effective and fairer.

In our everyday lives, our behavioural and societal and economic behaviour guides everything from how we represent the increasing costs of inflation, to how we vote, shop, and even donate to charity.

In review, this area of research can provide us with a fuller explanation of what it is to be human in economics. We are not simply a calculator, we are a social being, and we make decisions based on our social world. From this understanding we can design economic systems that have compassion and understanding behind them.