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Which incentives work? An experimental analysis of incentives for trainers

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Author Info
Omar Azfar
Clifford Zinnes

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Abstract

One conjecture in the theory of incentives is that incentives based on broader outcomes may be better at motivating agents than incentives based on narrow measures. We designed an experiment to test these hypotheses using a “prospective randomized evaluation procedure” (PREP). We then apply PREP to training programs as typically funded by donors of economic development assistance. We randomly assigned 274 participating entrepreneurs in the Philippines to one of 26, simultaneous, one-day, training classes in marketing. Trainers were given cash incentives based on the average score of their “students” on a standardized test containing an alternative number of questions, which were randomly assigned to each class. We then examined outcomes based on student satisfaction ratings of the trainer. Our results suggest that incentives based on broad outcomes are more effective than incentives based on narrow outcomes. We conclude with ways to improve our approach as well as with a discussion of the implications for using prospective randomized evaluation for improving the evaluation of donor projects.

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Paper provided by The Field Experiments Website in its series Natural Field Experiments with number 0011.

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Date of creation: 2006
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Handle: RePEc:feb:natura:0011

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Web page: http://www.fieldexperiments.com

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Related research
Keywords: randomized trials; project evaluation; teacher incentives; aid effectiveness;

Find related papers by JEL classification:
H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
I20 - Health, Education, and Welfare - - Education - - - General
L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out
O22 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 811-846, August. [Downloadable!] (restricted)
  2. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March. [Downloadable!] (restricted)
  3. Edward Miguel & Michael Kremer, 2001. "Worms: Education and Health Externalities in Kenya," NBER Working Papers 8481, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Brian A. Jacob & Steven D. Levitt, 2003. "Rotten Apples: An Investigation Of The Prevalence And Predictors Of Teacher Cheating," The Quarterly Journal of Economics, MIT Press, vol. 118(3), pages 843-877, August. [Downloadable!] (restricted)
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  5. Michael Kremer, 2003. "Randomized Evaluations of Educational Programs in Developing Countries: Some Lessons," American Economic Review, American Economic Association, vol. 93(2), pages 102-106, May. [Downloadable!]
  6. Randall Eberts & Kevin Hollenbeck & Joe Stone, 2000. "Teacher Performance Incentives and Student Outcomes," Staff Working Papers 00-65, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
  7. Paul Glewwe & Nauman Ilias & Michael Kremer, 2003. "Teacher Incentives," NBER Working Papers 9671, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Steven D. Levitt & John A. List, 2008. "Field Experiments in Economics: The Past, The Present, and The Future," NBER Working Papers 14356, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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