Do low-cost economic incentives motivate healthy behavior?

Abstract

We conducted a field experiment to test the effectiveness of a conditional, low-cost, and recurring financial incentive in motivating recreation center visits. Results indicate that the financial incentive did not motivate students’ recreation center visits. However, it was successful in increasing the frequency of recreation center visits for female students who had an established exercise habit. For a payout of $0.50, we estimate an increase of 0.4 visits per week for female students with established exercise habits. This provides modest evidence that the financial incentive structure was able to increase the behavioral response at the intensive margin. Our results show that the design of our financial incentive was not effective on the extensive margin. There was also no effect of the financial incentive on the recreation center visits for male students.