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Does Money Burn Fat? Evidence from a Randomized Experiment

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Author Info

  • Augurzky, Boris

    ()
    (RWI)

  • Bauer, Thomas K.

    ()
    (RWI)

  • Reichert, Arndt R.

    ()
    (RWI)

  • Schmidt, Christoph M.

    ()
    (RWI)

  • Tauchmann, Harald

    ()
    (RWI)

Abstract

We test whether financial incentives have an effect on weight reduction in a randomized controlled trial involving 700 obese persons assigned to three experimental groups. While two treatment groups obtain €150 and €300, respectively, for achieving an individually assigned target weight within four months, a control group receives no such premium. The results indicate that the weight losses for the treatment groups are 2.6 and 2.9 percentage points higher than that achieved by the control group, raising the average total weight loss for the incentivized groups to 5 percent of the initial weight. This percentage is typically regarded as a threshold to improve the health status of the obese. Further evidence indeed indicates some health improvements. The higher reward causes only the group of obese women to lose more weight. Overall, the results suggest that financial incentives can motivate people to lose weight significantly.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6888.

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Length: 42 pages
Date of creation: Sep 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6888

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Related research

Keywords: randomized experiment; financial incentives for weight loss; obesity; non-random sample attrition; effect heterogeneity;

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  1. Spenkuch, Jörg L., 2012. "Moral hazard and selection among the poor: Evidence from a randomized experiment," Journal of Health Economics, Elsevier, vol. 31(1), pages 72-85.
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  8. Alfredo R. Paloyo & Arndt Rüdiger Reichert & Holger Reinermann & Harald Tauchmann, 2011. "The Causal Link Between Financial Incentives and Weight Loss – An Evidence-based Survey of the Literature," Ruhr Economic Papers 0290, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
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Cited by:
  1. Arndt Reichert, 2012. "Obesity, Weight Loss, and Employment Prospects – Evidence from a Randomized Trial," Ruhr Economic Papers 0381, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. Tauchmann, Harald & Reichert, Arndt, 2013. "When Outcome Heterogeneously matters for Selection: a Generalized Selection Correction Estimator," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79698, Verein für Socialpolitik / German Economic Association.
  3. Harald Tauchmann, 2012. "leebounds: Lee’s treatment effect bounds for samples with nonrandom sample selection," German Stata Users' Group Meetings 2012 11, Stata Users Group.
  4. Cawley, John & Price, Joshua A., 2013. "A case study of a workplace wellness program that offers financial incentives for weight loss," Journal of Health Economics, Elsevier, vol. 32(5), pages 794-803.
  5. Boris Augurzky & Arndt Reichert & Christoph M. Schmidt, 2012. "The Effect of a Bonus Program for Preventive Health Behavior on Health Expenditures," Ruhr Economic Papers 0373, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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