Measuring the Welfare Effects of Shame and Pride

Luigi Butera, Robert Metcalfe, William Morrison, Dmitry Taubinsky

NBER Working Paper No. 25637
Issued in March 2019, Revised in August 2020
NBER Program(s):Economics of Aging, Health Economics, Public Economics, Political Economy

Public recognition is a frequent tool for motivating desirable behavior, yet its welfare effects are rarely measured. We develop a portable money-metric approach for measuring the direct welfare effects of shame and pride, which we deploy in a series of experiments on exercise and charitable behavior. In all experiments, public recognition motivates desirable behavior but creates highly unequal emotional consequences. High-performing individuals enjoy significant utility gains from pride, while low-performing individuals incur significant utility losses from shame. We estimate structural models of social signaling, and we use the models to explore the social efficiency of public recognition policies.

Supplementary materials for this paper:

• randomized controlled trials registry entry
• randomized controlled trials registry entry

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w25637