Monday, October 26, 2009

It's the Form of the Incentives, Stupid

I think that some of the more interesting work in economics looks at how people respond differently to monetary and non-monetary incentives. For example, one might initially think that if you offered people money to donate blood, they would donate more blood; however, the offering of money tends to somehow de-value the altruistic motives people have for donating blood, leading to less willingness to donate.

Here's a study that indicates the form of the payment is what really matters. When people are offered money for donation, they are less interested in donation; however, an offer of a voucher of similar value doesn't have the same negative effect. In a survey of 467 donors:
A substantial share of respondents declared they would stop being donors if paid a small amount of cash, but we do not find such effects when a voucher of the same nominal value is offered instead. The aversion to direct cash payments is particularly marked among women and older respondents, while there are neither gender nor age differences in the response to the voucher.

No comments:

Post a Comment