Case on Incentives to Exercise

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Econometrica, Vol. 77, No. 3 (May, 2009), 909–931 INCENTIVES TO EXERCISE GARY CHARNESS University of California at Santa Barbara, Santa Barbara, CA 93106-9210, U.S.A. URI GNEEZY Rady School of Management, University of California at San Diego, La Jolla, CA 92093-0553, U.S.A.

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Econometrica, Vol. 77, No. 3 (May, 2009), 909–931

INCENTIVES TO EXERCISE BY GARY CHARNESS AND URI GNEEZY1
Can incentives be effective in encouraging the development of good habits? We investigate the post-intervention effects of paying people to attend a gym a number of times during one month. In two studies we find marked attendance increases after the intervention relative to attendance changes for the respective control groups. This is entirely driven by people who did not previously attend the gym on a regular basis. In our second study, we find improvements on health indicators such as weight, waist size, and pulse rate, suggesting the intervention led to a net increase in total physical activity rather than to a substitution away from nonincentivized ones. We argue that there is scope for financial intervention in habit formation, particularly in the area of health. KEYWORDS: Exercise, field experiment, habit formation, incentives.

INTRODUCTION

ON SEPTEMBER 18, 2006, New York Mayor Michael Bloomberg announced a new

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