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The behavioralist goes to school: Leveraging behavioral economics to improve educational performance

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  • Levitt, Steven D.
  • List, John A.
  • Neckermann, Susanne
  • Sado, Sally

Abstract

Decades of research on behavioral economics have established the importance of factors that are typically absent from the standard economic framework: reference dependent preferences, hyperbolic preferences, and the value placed on non-financial rewards. To date, these insights have had little impact on the way the educational system operates. Through a series of field experiments involving thousands of primary and secondary school students, we demonstrate the power of behavioral economics to influence educational performance. Several insights emerge. First, we find that incentives framed as losses have more robust effects than comparable incentives framed as gains. Second, we find that non-financial incentives are considerably more cost-effective than financial incentives for younger students, but were not effective with older students. Finally, and perhaps most importantly, consistent with hyperbolic discounting, all motivating power of the incentives vanishes when rewards are handed out with a delay. Since the rewards to educational investment virtually always come with a delay, our results suggest that the current set of incentives may lead to underinvestment. For policymakers, our findings imply that in the absence of immediate incentives, many students put forth low effort on standardized tests, which may create biases in measures of student ability, teacher value added, school quality, and achievement gaps. --

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 12-038.

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Date of creation: 2012
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Handle: RePEc:zbw:zewdip:12038

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Keywords: educational economics; behavioral economics; field experiment;

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Cited by:
  1. Amine Ouazad & Lionel Page, 2012. "Students’ Perceptions of Teacher Biases: Experimental Economics in Schools," CEE Discussion Papers 0133, Centre for the Economics of Education, LSE.
  2. Nicholas C. Barberis, 2012. "Thirty Years of Prospect Theory in Economics: A Review and Assessment," NBER Working Papers 18621, National Bureau of Economic Research, Inc.
  3. Hoogveld, Nicky & Zubanov, Nikolay, 2014. "The Power of (No) Recognition: Experimental Evidence from the University Classroom," IZA Discussion Papers 7953, Institute for the Study of Labor (IZA).
  4. Timothy J. Bartik & Marta Lachowska, 2012. "The Short-Term Effects of the Kalamazoo Promise Scholarship on Student Outcomes," Upjohn Working Papers and Journal Articles 12-186, W.E. Upjohn Institute for Employment Research.
  5. Philipp Beltz & Susanne Link & Andreas Ostermaier, 2012. "Incentives for Students: Evidence from Two Natural Experiments," Ifo Working Paper Series Ifo Working Paper No. 133, Ifo Institute for Economic Research at the University of Munich.
  6. Nicholas C. Barberis, 2013. "Thirty Years of Prospect Theory in Economics: A Review and Assessment," Journal of Economic Perspectives, American Economic Association, vol. 27(1), pages 173-96, Winter.
  7. John A. List & Anya Savikhin Samek, 2014. "The Behavioralist as Nutritionist: Leveraging Behavioral Economics To Improve Child Food Choice and Consumption," NBER Working Papers 20132, National Bureau of Economic Research, Inc.
  8. Roland G. Fryer, Jr & Steven D. Levitt & John List & Sally Sadoff, 2012. "Enhancing the Efficacy of Teacher Incentives through Loss Aversion: A Field Experiment," NBER Working Papers 18237, National Bureau of Economic Research, Inc.
  9. Olivier Armantier & Amadou Boly, 2014. "On the effects of incentive framing on bribery: evidence from an experiment in Burkina Faso," Economics of Governance, Springer, vol. 15(1), pages 1-15, February.
  10. Ostermaier, Andreas & Beltz, Philipp & Link, Susanne, 2013. "Do university policies matter? Effects of Course Policies on Performance," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79924, Verein für Socialpolitik / German Economic Association.

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