Cash rewards work, but not all rewards are created equal. This is according to a new study which leveraged two cash incentive tools in a low-income community. It turns out, the risk of losing a cash incentive is a particularly strong motivator even when anticipated reward amounts are equal.
“We found we can get people to exercise more often for the same anticipated cash reward simply by changing how the reward is delivered,” said lead author and USC Schaeffer Center Senior Fellow Jason Doctor.
Regular exercise has well established benefits, including lowering the risk of heart attacks, high blood pressure, colon cancer and type 2 diabetes. But sticking to a regular exercise plan is challenging for everyone. As a result, numerous financial incentives aimed at promoting exercise and healthy lifestyles have been developed and studied over the years.
Jason Doctor, who co-directs the Schaeffer Center’s Behavioral Science Program and is an associate professor at the Price School of Public Policy designed a 12-week study to analyze two common incentives: direct cash rewards via a lottery and loss protection. The study consisted of 153 participants who were offered two exercise classes a week for 12 weeks.
Individuals who attended the first exercise class were entered into a drawing a week later which had a $20 cash prize. Each participant had a 90% chance of winning the lottery.
To study whether protecting against this potential loss was a motivator to attend exercise classes, the researchers gave half the participants a second option: if they attended both exercise classes each week, they were guaranteed the $20 cash prize. In contrast, if individuals in the first group attended the second class, they received a flat payment of $2 for attending. This meant that statistically, individuals in both groups who participated in the same combination of classes each week had the same chance of receiving the $20 reward.
Over the twelve weeks, both groups attended more than 50% of classes. The results suggest loss protection, even though the risk of losing the cash prize was relatively low, was a stronger motivator than a direct cash reward. Individuals who were guaranteed the $20 when they attended both classes in the week attended 64.8% of exercise classes while the group who were entered into a lottery attended 55.5% of classes. Participants in both groups were more likely to attend the first exercise class than the second class of the week.
“We were able to get more value out of programs that offer cash incentives for exercise, this is important since these programs are a limited resource.” said Doctor.
Furthermore, class attendance in both arms of the study was steady throughout the 12-weeks of the program, suggesting these incentives might combat the typical attrition seen in diet and exercise programs.
Daniella Meeker, Tara Knight, Patra Childress, and Elmar R. Aliyev also authored the study. Funding for the study was provided by the National Institutes on Aging of the National Institutes of Health under grant numbers 1RC4AG039115, P30AG024968, and R33AG057395. COPE Health Solutions and QueensCare Family Clinics collaborated on this project.