Would you lose weight for money?

A new report questions whether money-based incentives would increase the chance of a more permanent exercise regime among people.

The World Bank notes that monetary incentives are being increasingly introduced by policymakers into all kinds of interventions across a wide range of sectors, including health, education, and the environment.

“The rationale for this trend is that we often make choices without accounting for how these choices may affect other people – and sometimes even ourselves. Obesity is one such example. It imposes high healthcare costs on society,” said Arndt Reichert, an economist in the Development Impact Evaluation (DIME) team within the Development Research Group at the World Bank.

He said that economists argue that well-designed monetary incentives can drive people to alter their choices so that everyone can benefit.

According to the World Bank, in health, the bulk of existing literature concludes that financial incentive schemes promoting healthy behavior are quite effective in the short run.

“Think about all the times we’ve rushed to our favorite exercise class lest we be fined for a no-show or were rewarded for showing up for ten classes in a row. Now what happens when those incentives eventually disappear altogether,” questioned Reichert.

He noted that there are two theories on the long-term effects of monetary incentives.

The motivation crowding theorists say financial incentives can lower helpful behavioral motives by signaling that changing current behavior is difficult or unattractive.

People then go to the gym less often than they would have without monetary rewards.

The opposition – the habit-formation crowd – claims there is a positive correlation between past and present consumption which implies that a short-run monetary incentive for healthy behavior will translate into habitual behavior, the World Bank said.

It highlighted a new paper which plays with the second theory using data from a randomized experiment investigating monetary rewards for weight reduction in obese people.

The experiment

A sample size of 700 participants was randomly assigned to three experimental groups: one group received €300 to achieve individually assigned contractual target weight losses between 6% and 8% within four months.

Another group received €150 euros for the same objective.

All participants – with or without weight loss rewards – who achieved 50% of the contracted weight loss in the first phase, were randomly assigned to a second weight-maintenance intervention. These groups received €500 and €250 respectively to maintain their weights.

This, the World Bank said, came as a surprise to those assigned to the two intervention groups because participants had not been informed about the second weight‐maintenance intervention, thus eliminating any anticipation during the weight-loss intervention.

Results of the experiment

At the end of the first phase, all groups on average weighed less than at the start of the experiment with statistically significant weight losses in both treatment groups.

A similar result was observed following the second intervention which showed that weight loss effects continued.

“The paper is the first to show that monetary rewards can have lasting effects on body weight,” Reichert said.

“The results show that the effects remained quite stable over time and was mainly due to differences in the speed of weight (re-)gain between the treatment groups and the control group.

“The effects of the weight-maintenance rewards, in contrast, do not persist over time. This is an important finding, too. In fact, this paper is also the first of its kind to examine weight-maintenance rewards in a large-scale experimental study,” the economist said.

Size of the reward

The World Bank pointed out that this experiment does not reveal a statistically significant difference between the lower and higher rewards, despite remarkably better results from the higher weight loss reward.

“Overall, the results of the experiment suggest that habit formation tops any potential adverse effects of monetary incentives – proving the age old adage that we are indeed creatures of habit, occasionally lured into successfully sustaining healthy habits with financial rewards,” Reichert said.

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Would you lose weight for money?