Types Of Financial Incentives Research Articles

Less stick more carrot? Increasing the uptake of deposit contract financial incentives for physical activity: A randomized controlled trial

BackgroundFinancial incentives are a promising tool to help people increase their physical activity, but they are expensive to provide. Deposit contracts are a type of financial incentive in which participants pledge their own money. However, low uptake is a crucial obstacle to the large-scale implementation of deposit contracts. Therefore, we investigated whether (1) matching the deposit 1:1 (doubling what is deposited) and (2) allowing for customizable deposit amounts increased the uptake and short term effectiveness of a deposit contract for physical activity. MethodsIn this randomized controlled trial, 137 healthy students (age M = 21.6 years) downloaded a smartphone app that provided them with a tailored step goal and then randomized them to one of four experimental conditions. The deposit contract required either a €10 fixed deposit or a customizable deposit with any amount between €1 and €20 upfront. Furthermore, the deposit was either not matched or 1:1 matched (doubled) with a reward provided by the experiment. During 20 intervention days, daily feedback on goal progress and incentive earnings was provided by the app. We investigated effects on the uptake (measured as agreeing to participate and paying the deposit) and effectiveness of behavioral adoption (measured as participant days goal achieved). FindingsOverall, the uptake of deposit contracts was 83.2%, and participants (n = 113) achieved 14.9 out of 20 daily step goals. A binary logistic regression showed that uptake odds were 4.08 times higher when a deposit was matched (p = .010) compared to when it was not matched. Furthermore, uptake odds were 3.53 times higher when a deposit was customizable (p = .022) compared to when it was fixed. Two-way ANCOVA showed that matching (p = .752) and customization (p = .143) did not impact intervention effectiveness. However, we did find a marginally significant interaction effect of deposit matching X deposit customization (p = .063, ηp2 = 0.032). Customization decreased effectiveness when deposits were not matched (p = .033, ηp2 = 0.089), but had no effect when deposits were matched (p = .776, ηp2 = 0.001). ConclusionsWe provide the first experimental evidence that both matching and customization increase the uptake of a deposit contract for physical activity. We recommend considering both matching and customization to overcome lack of uptake, with a preference for customization since matching a deposit imposes significant additional costs. However, since we found indications that customizable deposits might reduce effectiveness (when the deposits are not matched), we urge for more research on the effectiveness of customizable deposit contracts. Finally, future research should investigate which participant characteristics are predictive of deposit contract uptake and effectiveness. Pre-registrationOSF Registries, https://osf.io/cgq48.

Energy Efficiency and Economic Policy: Comprehensive Theoretical, Empirical, and Policy Review

In this paper, we analyze the role of economic policy in prompting energy efficiency. This study reviews three aspects, theoretical, empirical, and existing policies to evaluate the relationship of energy efficiency and economic policy. This study furthermore identifies the existing issues from a policy perspective in energy efficiency. Although not all public policies may be justified, it suggests that these types of financial incentives, particularly those based on economic instruments, can play a crucial role in advancing energy efficiency. Additionally, this study identifies existing issues in energy efficiency target achievement and proposes solutions based on the literature review. Finally, it provides possible future research pathways from the aspect of economic policy tools in energy efficiency.

Company-Sponsored Online Co-Creation and Financial Incentives: The Impact of Intrinsic Motivation on Participation Intention

ABSTRACT Participation in sponsored online co-creation is said to be driven primarily by an individual’s intrinsic motivation, which in turn may be crowded-out, or undermined by financial incentives. The effect of financial incentives, specifically in a company-sponsored online co-creation brainstorming (COCB) context, however, remains unexplored. In this study, we use LEGO Ideas, a prominent COCB, as an exemplar and employ a between-subjects randomized experimental design to examine the effect of different types of financial incentives on intrinsic motivation’s impact on participation intention in a COCB context, either directly or indirectly through personal innovativeness in the domain of information technology. Our findings suggest that focused financial incentives, representing situations where financial rewards are administered exclusively on the basis of excellent performance, offer the best outcome for predicting participation intention. These findings contribute to our knowledge of the use of financial incentives in sponsored online co-creation generally, and specifically in COCBs.

Exploring the Relationship Between Quality Rating and Improvement System Supports and Global Quality in Family Child Care

A Quality Rating and Improvement System (QRIS) is one widespread method to provide a framework for quality improvement in early care and education. However, there is little research examining the relationship between QRIS supports and quality changes in family child care programs. This study aims to examine the associations between supports offered through Delaware’s QRIS and global quality changes in family child care programs. Delaware’s QRIS supports included financial incentives and on-site technical assistance. Data were extracted from the administrative database on 139 family child care programs participating in the QRIS. Repeated measures multivariate analysis of covariance was used to examine the effects of time and Delaware’s QRIS supports. Results showed significant relationships between QRIS supports and the improvement of global quality in family child care programs as measured by the Family Child Care Environment Rating Scale-Revised. Specifically, the amount of on-site technical assistance was significantly associated with changes in the Interaction and Program Structure subscale scores. Additionally, grants received through the QRIS were significantly associated with quality improvements in the home environment. Considering that the amount of technical assistance alone was effective in improving the global quality of family child care programs, professional development strategies that aim to articulate and enhance the technical assistance that is provided to programs would be useful. Further, various types of financial incentives are encouraged to assist family child care programs in improving the structural quality of their environments.

Chronically ill patients' preferences for a financial incentive in a lifestyle intervention. Results of a discrete choice experiment.

BackgroundThe preferences of diabetes type 2 patients and cardiovascular disease patients for a financial incentive added to a specified combined lifestyle intervention were investigated.MethodsA discrete choice experiment questionnaire was filled out by 290 diabetes type 2 patients (response rate 29.9%). Panel-mixed-logit models were used to estimate the preferences for a financial incentive. Potential uptake rates of different financial incentives and relative importance scores of the included attributes were estimated. Included attributes and levels were: form of the incentive (cash money and different types of vouchers), value of the incentive (ranging from 15 to 100 euros), moment the incentive is received (start, halfway, after finishing the intervention) and prerequisite for receiving the incentive (registration, attendance or results at group or individual level).ResultsPrerequisites for receiving the financial incentive were the most important attribute, according to the respondents. Potential uptake rates for different financial incentives ranged between 37.9% and 58.8%. The latter uptake rate was associated with a financial incentive consisting of cash money with a value of €100 that is handed out after completing the lifestyle program with the prerequisite that the participant attended at least 75% of the scheduled meetings.ConclusionsThe potential uptake of the different financial incentives varied between 37.9% and 58.8%. The value of the incentive does not significantly influence the potential uptake. However, the potential uptake and associated potential effect of the financial incentive is influenced by the type of financial incentive. The preferred type of incentive is €100 in cash money, awarded after completing the lifestyle program if the participant attended at least 75% of the scheduled meetings.

Non-renewable resource extraction under financial incentives to reduce and reverse stock pollution

This paper examines the impacts of three types of financial incentives on non-renewable resource extraction that produces reversible stock pollution. A particular emphasis is the timing of remediation. We show that traditional standards-based regulation incentivizes operators to delay remediation. A policy that instead requires the operator to pay ongoing damages from the pollution stock via a Pigouvian stock tax is socially optimal and provides the operator with the correct incentives to remediate the pollution stock. A Pigouvian pollution flow tax, which has been a popular recommendation in the stock pollution literature, does not generate these remediation incentives. Nor do financial assurances, also known as reclamation bonds. The financial incentives embodied in mine regulatory reform in the United States, China and Western Australia have no explicit intention of implementing a Pigouvian stock tax. They are therefore unlikely to incentivize optimally timed remediation by the firm, even though the policy reforms have been driven by a recognition that past standards-based policies were ineffective at incentivizing timely remediation.

How can financial incentives promote local ownership of onshore wind and solar projects? Case study evidence from Germany, Denmark, the UK and Ontario

Mobilising citizens as investors in local solar photovoltaic and onshore wind energy projects can help meet climate objectives, generate local development opportunities, and build social support for low carbon transition. This can be achieved through the introduction of financial incentives attractive to local actors. To investigate what types of financial incentives are effective at the feasibility, development, construction, and operation stages of project development, we undertake a comparative case study of their use in Denmark; Germany; the UK; and Ontario, Canada. We find that a requirement for incentives such as grants and soft loans at the feasibility and development stages is a distinguishing feature of projects with citizen involvement, reflecting their greater risk aversion, lack of technical experience and financial capacity, and their inability to balance risk across a portfolio of projects. At later project stages, market-independent supports (feed in tariffs, grants, and tax incentives) have been effective in mobilising investment, but market-based supports (feed in premiums and quota schemes) can also be tailored to the specific needs of local community actors. These findings add a new dimension to the growing academic and policy debate about how Governments can effectively mobilise investment from local communities and citizens in distributed renewable technologies.

Impact of a Pay-for-Performance Program on Care for Black Patients with Hypertension: Important Answers in the Era of the Affordable Care Act.

Evaluate the effect of a pay-for-performance intervention on the quality of hypertension care provided to black patients and determine whether it produced risk selection. Primary data collected between 2007 and 2009 from Veterans Affairs physicians and their primary care panels. Nested study within a cluster randomized controlled trial of three types of financial incentives and no incentives (control). We compared the proportion of physicians' black patients meeting hypertension performance measures for baseline and final performance periods. We measured risk selection by comparing the proportion of patients who switched providers, patient visit frequency, and panel turnover. Due to limited power, we prespecified in the analysis plan combining the three incentive groups and oversampling black patients. Data collected electronically and by chart review. The proportion of black patients who achieved blood pressure control or received an appropriate response to uncontrolled blood pressure in the final period was 6.3 percent (95 percent confidence interval, 0.8-11.7 percent) greater for physicians who received an incentive than for controls. There was no difference between intervention and controls in the proportion of patients who switched providers, visit frequency, or panel turnover. A pay-for-performance intervention improved blood pressure control or appropriate response to uncontrolled blood pressure in black patients and did not produce risk selection.

Incentives in Diabetic Eye Assessment by Screening (IDEAS): study protocol of a three-arm randomized controlled trial using financial incentives to increase screening uptake in London.

BackgroundDiabetes is an increasing public health problem in the UK and globally. Diabetic retinopathy is a microvascular complication of diabetes, and is one of the leading causes of blindness in the UK working age population. The diabetic eye screening programme in England aims to invite all people with diabetes aged 12 or over for retinal photography to screen for the presence of diabetic retinopathy. However, attendance rates are only 81 %, leaving many people at risk of preventable sight loss.MethodsThis is a three arm randomized controlled trial to investigate the impact of different types of financial incentives (based on principles from behavioral economics) on increasing attendance at diabetic eye screening appointments in London. Eligible participants will be aged 16 or over, and are those who have been invited to screening appointments annually, but who have not attended, or telephoned to rearrange an appointment, within the last 24 months.Eligible participants will be randomized to one of three conditions:Control condition (usual invitation letter)Fixed incentive condition (usual invitation letter, including a voucher for £10 if they attend their appointment)Probabilistic incentive condition (invitation letter, including a voucher for a 1 in 100 chance of winning £1000 if they attend their appointment).Participants will be sent invitation letters, and the primary outcome will be whether or not they attend their appointment. One thousand participants will be included in total, randomized with a ratio of 1.4:1:1. In order to test whether the incentive scheme has a differential impact on patients from different demographic or socio-economic groups, information will be recorded on age, gender, distance from screening center, socio-economic status and length of time since they were last screened. A cost-effectiveness analysis will also be performed.DiscussionThis study will be the first trial of financial incentives for improving uptake of diabetic eye screening. If effective, the intervention may suggest a cost-effective way to increase screening rates, thus reducing unnecessary blindness.Trial registrationISRCTN14896403, 25 February 2016

Challenges and Recommendations to Recruiting Women Who Do Not Adhere to Follow-Up Gynecological Care.

PurposeNon-adherence to recommended follow-up visits after an abnormal cytological finding is associated with poorer outcomes and higher health care costs. The purpose of this paper is to describe the challenges when examining reasons for non-adherence to cervical cancer screening follow-up and to discuss the recommendations to overcome those challenges.MethodsWe conducted a telephone survey with two subgroups of women: 1) those which adhered to recommended follow-up care after an abnormal Pap test, and 2) those which did not adhere.ResultsThe follow-up accrual among non-adherent women lagged behind that of adherers. We were able to contact and conduct a survey with 51% of the adherers and 26% of the non-adherers. The challenges in studying non-adherent women were related to several distinct factors: 1) the definition of non-adherence, 2) the availability of alternate contact information, 3) the amount and type of financial incentives, and 4) the availability of staffing. We describe strategies employed to increase the accrual of non-adherent women.DiscussionThis paper describes four recommendations that may play a role in understanding and reducing non-adherence to follow-up gynecological care.

Rewards and performance: A comparison across creative and routine tasks

Many jobs in knowledge-based economies involve non-routine tasks that require creativity. This raises the question of how to incentivize creative performance. There is a large literature that documents positive effects of rewards on simple tasks. However, a different strand of the literature suggests that rewards may be detrimental for tasks that are intrinsically motivating like creative tasks. This paper reports the results from a real-effort lab experiment with 750 subjects that studies the impact of two different types of financial incentives (noncontingent gift or tournament prize) on creative as well as purely effort-based performance. This allows us to study the effectiveness of financial rewards on creative performance and to investigate whether the effectiveness depends on the performance contingency of the reward and on the nature of the task. Our results show that routine as well as creative task performance significantly increase under the tournament scheme and, hence, that performance-contingent rewards trigger creativity effectively. In contrast, a noncontingent gift triggers reciprocity of subjects only in the simple task while creative performance is not affected. This suggests that the effectiveness of gifts depends on the nature of the task. We discuss implications for economic theory as well as for workplace management.

The effect of financial incentives on chlamydia testing rates: Evidence from a randomized experiment

Financial incentives have been used in a variety of settings to motivate behaviors that might not otherwise be undertaken. They have been highlighted as particularly useful in settings that require a single behavior, such as appointment attendance or vaccination. They also have differential effects based on socioeconomic status in some applications (e.g. smoking). To further investigate these claims, we tested the effect of providing different types of non-cash financial incentives on the return rates of chlamydia specimen samples amongst 16–24 year-olds in England. In 2011 and 2012, we ran a two-stage randomized experiment involving 2988 young people (1489 in Round 1 and 1499 in Round 2) who requested a chlamydia screening kit from Freetest.me, an online and text screening service run by Preventx Limited. Participants were randomized to control, or one of five types of financial incentives in Round 1 or one of four financial incentives in Round 2. We tested the effect of five types of incentives on specimen sample return; reward vouchers of differing values, charity donation, participation in a lottery, choices between a lottery and a voucher and including vouchers of differing values in the test kit prior to specimen return. Financial incentives of any type, did not make a significant difference in the likelihood of specimen return. The more deprived individuals were, as calculated using Index of Multiple Deprivation (IMD), the less likely they were to return a sample. The extent to which incentive structures influenced sample return was not moderated by IMD score. Non-cash financial incentives for chlamydia testing do not seem to affect the specimen return rate in a chlamydia screening program where test kits are requested online, mailed to requestors and returned by mail. They also do not appear more or less effective in influencing test return depending on deprivation level.

Can Financial Incentives for Regional Education Authorities Reduce School Dropout?

This paper investigates the effect of a new type of financial incentive in education targeted at regional authorities. Previous studies have focused on financial incentives for students, teachers or schools. We identify the effect by exploiting the gradual introduction of a new policy aimed at reducing school dropout in the Netherlands. The introduction of the policy in 14 out of 39 regions and the use of a specific selection rule for the participating regions allow us to estimate local difference-in-differences models. Using administrative data for all Dutch students in the year before and the year after the introduction of the new policy we find no effect of the financial incentive scheme on school dropout. In addition, we find suggestive evidence for manipulation of outcomes in response to the program.

Acceptability of financial incentives to improve health outcomes in UK and US samples

In an online study conducted separately in the UK and the US, participants rated the acceptability and fairness of four interventions: two types of financial incentives (rewards and penalties) and...

New payment model for rural health services in Mongolia

This article describes experiences in Mongolia in designing and implementing a new method of payment for rural health services. The new method involves using a formula that allocates 65% of available funding on the basis of risk-adjusted capitation, 20% on the basis of asset costs, 10% on the basis of variations in distance-related costs, and 5% on the basis of satisfactory attainment of quality of care targets. Rural populations have inferior health services in most countries, whether rich or poor. Their situation has deteriorated in most transition economies, including Mongolia since 1990. One factor has been the use of inappropriate methods of payment of care providers. Changes in payment methods have therefore been made in most transition economies with mixed success. One factor has been a tendency to over-simplify, for example, to introduce capitation without risk adjustment or to make per case payments that ignored casemix. In 2002, the Mongolian government decided that its crude funding formula for rural health services should be replaced. It had two main components. The first was payment of an annual grant by the local government from its general revenue on the basis of estimated service population, number of inpatient beds, and number of clinical staff. The second was an output-based payment per inpatient day from the National Health Insurance Fund. The model was administratively complicated, and widely believed to be unfair. The two funding agencies were giving conflicting types of financial incentives. Most important, the funding methods gave few incentives or rewards for service improvement. In some respects, the incentives were perverse (such as the encouragement of hospital admission by the National Health Insurance Fund). A new funding model was developed through statistical analysis of data from routine service reports and opinions questionnaires. As noted above, there are components relating to per capita needs for care, capital assets, distance, and quality of care. The risk-adjusted capitation component determines needs classes by use of age, gender, and family income. The model was accepted by all concerned parties, and steps are now being taken to implement it under transitional arrangements. Many of the data used to parameterize the model are inaccurate and will need to be updated in the near future. However, the model is inherently valid, and procedures have been set in place that will ensure accuracy is improved on a continuing basis. An important reason why the government strongly supported implementation was its commitment to implement output-based budgeting across all government sectors. The new model provided a convenient way of applying output-based budgeting to one major component of the health sector.

Financial incentives in recruitment of oocyte donors

Financial incentives in recruitment of oocyte donors

Evaluating combinations of on-and off-reserve conservation strategies for the Agulhas Plain, South Africa: a financial perspective

This study investigates the practical and financial implications of alternative strategies for meeting explicit conservation goals on the Agulhas Plain, South Africa. This is an area of exceptional biodiversity increasingly threatened by alien plant infestation, urbanisation, and agricultural expansion. In addition to traditional on-reserve protection, we identify two types of property-rights agreements (conservation easements and management agreements) and two types of financial incentives (land management assistance and tax relief) as appropriate for encouraging off-reserve conservation on targeted lands in the area. Specifically, we suggest actions to offset the costs facing landowners under new pieces of legislation, such as alien-clearing requirements and a property tax. After refining an existing GIS database of cadastral units targeted for conservation, we assigned on- or off-reserve conservation status to properties on the basis of a simple decision system, which took the irreplaceability of the area into account. Three implementation scenarios were designed: an entirely ‘on-reserve’ approach, a mixed on- and off-reserve approach, and the mixed approach in conjunction with financial incentives. The conservation costs, to both the public and private sector (including expanded obligations from new legislation), were first modelled and then analysed in a Geographic Information System. We found that a traditional on-reserve approach would cost the state about R240M in acquisition costs, whereas both mixed approaches, using the decision rules developed in this study, would involve leaving 40% of targeted areas in private hands, saving the state 80% in acquisition costs. Of the subsequent conservation costs, which total R401M (present value @ 6% discount rate; Scenario 1), most are alien clearing costs. Since landowners are now compelled to put up these costs, the state could make further savings (44–51%) under a mixed management scenario. Using Property Rate relief as an additional financial incentive is relatively efficient in that it may save targeted private landowners 32% in Property Rates, at a cost of 5.5% of expected tax revenue to the state. Given the prohibitive costs, realising conservation goals in the Agulhas Plain will probably depend upon the establishment of institutions, mechanisms, and incentives for private participation in conservation.

Indian Debt Market – Realities & Issues

Traditionally Indian banking system provided the much-needed financial support to industry and commerce. Till the onset of financial sector reforms in early 1990s the Indian industry depended heavily on banks and development financial institutions for their working capital and long-term projects respectively. Capital was scarce and hence, needed rationing to areas and sectors where the government wanted and prioritized. The existence of Controller of Capital Issues was the guiding force behind investment where public support was needed. At the time of its liberation from the British in 1947 India had only the traditional commercial banks and these banks were small and owned by private companies who had other interests in business and promoted banks to channelize resources to their activities. It was no different from earlier fragmented banking system of the USA. These banks supplied shorter maturity credit for working capital needs of the industry and commerce as major infrastructure, manufacturing facilities, etc. were financed by the Government through priorities in Five Year Plans. Public sector undertakings were set up to achieve the industrial self reliance objective of the nation. The role of creating capital formation was shifted primarily to the PSUs. The banks were willing to fund basically the working capital requirements of the credit-worthy borrowers on the security of tangible assets. These PSUs were funded through budgetary support as well as support from the DFIs. Thus emerged a well-knit structure of national and state level development financial institutions (DFIs) for meeting requirements of medium and long-term finance of all range of industrial units, from the smallest to the very large ones. Government as well as Reserve Bank of India nurtured DFIs through various types of financial incentives and other supportive measures.

Effect of tiered prescription copayments on the use of preferred brand medications.

Health plans are increasingly using more open drug formularies that offer differential prescription copayments as an incentive to enrollees to use brands that plans prefer. How much this financial incentive affects use of preferred brands has not been widely reported. The aim of this study was to estimate the effect of tiered copayments on the choice between preferred and nonpreferred brand medications. Longitudinal logistic regression analyses of pharmacy claims from 1998 and 1999 comparing concurrent groups that were or were not exposed to tiered copayments. Enrollees in four independent physician practice association model health plans who had pharmacy claims for angiotensin converting enzyme inhibitors (ACEI), proton pump inhibitors (PPI), or hydroxymethylglutaryl coenzyme A reductase inhibitors (STATINS). Change in the percentage of prescription claims that were for preferred brands. Regression adjusted estimates of the average net increase in the percentage use of preferred brands of ACEI, PPI and STATIN from first quarter 1998 to third quarter 1999 attributed to tiered prescription copayments were 13.3 (P = 0.001), 8.9 (P = 0.03), and 6.0 (P <0.001) percentage points, respectively. Tiered prescription copayments were associated with a significant shift from nonpreferred to preferred brand medications. This type of financial incentive can help purchasers providing open access drug benefits by steering use of medications toward lower cost brands. The clinical effects of changes in medication use brought about differential copayments warrant further investigation.

Regional policy and company investment behaviour

McGreevy T. E. and Thomson A. W. J. (1983) Regional policy and company investment behaviour, Reg. Studies 17, 347–358. The paper looks at the effectiveness of regional financial assistance from the perspective of the companies receiving such assistance. It notes that very little attention has been given to company behaviour and perception as opposed to macro-economic analysis of regional policy. The article is based on a survey of forty-nine Scottish manufacturing firms which had been offered regional selective assistance and sets out to examine: (1) methods of investment analysis and the role of regional incentives in this process; (2) to investigate what would have happened in the absence of such assistance; and (3) to establish which type of financial incentive was most influential. The results in the opinion of the authors do indicate that regional policy has a positive impact in providing investment and jobs in Scotland which would not have otherwise occurred.