Incentives, Commitments and Habit Formation in Exercise: Evidence from a Field Experiment with Workers at a Fortune-500 Company

Heather Royer, Mark F. Stehr, Justin R. Sydnor

NBER Working Paper No. 18580
Issued in November 2012
NBER Program(s):   HC   HE

Rapidly growing health-care costs have fueled interest in using financial incentives to improve health behaviors. Most of the research on financial incentives outside of clinical studies has been observational, limiting our ability to make causal inferences on their effectiveness. The few carefully-designed studies have generally found little lasting effect on behavior after the incentive program ended. We report on a large field experiment with employees of a Fortune 500 company which offered incentives for using the company gym. In addition to understanding the effects of incentives alone, we investigate a novel approach to generate lasting behavior change using self-funded commitment contracts. At the end of incentive period, half of the incentive group were offered the opportunity to create a self-funded commitment contract to motivate their own behavior. Workers responded strongly during the incentive period, doubling their rate of use of the company gym. After the incentive period ended, we find that those offered incentives only continued to attend at higher rates, but the effect was quite modest in magnitude. The availability of a commitment contract, however, substantially improved the long-run effects of the incentive program both during the commitment period and well beyond, offering a promising new approach to increasing the long-run effect of incentive programs.

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Acknowledgments

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