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Does Money Burn Fat? – Evidence from a Randomized Experiment

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  • Augurzky, Boris
  • Bauer, Thomas K.
  • Reichert, Arndt R.
  • Schmidt, Christoph M.
  • Tauchmann, Harald

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.

Suggested Citation

  • Augurzky, Boris & Bauer, Thomas K. & Reichert, Arndt R. & Schmidt, Christoph M. & Tauchmann, Harald, 2012. "Does Money Burn Fat? – Evidence from a Randomized Experiment," Ruhr Economic Papers 368, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:368
    DOI: 10.4419/86788423
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    2. Arndt Reichert & Harald Tauchmann, 2014. "When outcome heterogeneously matters for selection: a generalized selection correction estimator," Applied Economics, Taylor & Francis Journals, vol. 46(7), pages 762-768, March.
    3. Arndt R. Reichert, 2015. "Obesity, Weight Loss, and Employment Prospects: Evidence from a Randomized Trial," Journal of Human Resources, University of Wisconsin Press, vol. 50(3), pages 759-810.
    4. Beatty, Timothy K.M. & Katare, Bhagyashree, 2018. "Low-cost approaches to increasing gym attendance," Journal of Health Economics, Elsevier, vol. 61(C), pages 63-76.
    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.
    6. Bensch, Gunther & Grimm, Michael & Peters, Jörg, 2015. "Why do households forego high returns from technology adoption? Evidence from improved cooking stoves in Burkina Faso," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 187-205.
    7. Tauchmann Harald & Wübker Ansgar, 2023. "Weight Loss and Sexual Activity in Adult Obese Individuals: Establishing a Causal Link," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 243(6), pages 663-698, December.
    8. Schmidt Christoph M., 2014. "Wirkungstreffer erzielen – Die Rolle der evidenzbasierten Politikberatung in einer aufgeklärten Gesellschaft," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 15(3), pages 219-233, October.
    9. Lucas Hafner & Harald Tauchmann & Ansgar Wübker, 2021. "Does moderate weight loss affect subjective health perception in obese individuals? Evidence from field experimental data," Empirical Economics, Springer, vol. 61(4), pages 2293-2333, October.
    10. 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.
    11. Barbieri, Paolo Nicola, 2015. "Body Weight, Dieting and Obesity Traps," MPRA Paper 67671, University Library of Munich, Germany.
    12. Bensch, Gunther & Grimm, Michael & Peters, Jörg, 2014. "Why Do Households Forego High Returns from Technology Adoption - Evidence from Improved Cook Stoves in Burkina Faso," Ruhr Economic Papers 498, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    13. Carrera, Mariana & Royer, Heather & Stehr, Mark & Sydnor, Justin, 2018. "Can financial incentives help people trying to establish new habits? Experimental evidence with new gym members," Journal of Health Economics, Elsevier, vol. 58(C), pages 202-214.
    14. 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.
    15. Paloyo, Alfredo R. & Reichert, Arndt R. & Reuss-Borst, Monika & Tauchmann, Harald, 2015. "Who responds to financial incentives for weight loss? Evidence from a randomized controlled trial," Social Science & Medicine, Elsevier, vol. 145(C), pages 44-52.
    16. Augurzky, Boris & Bauer, Thomas K. & Reichert, Arndt R. & Schmidt, Christoph M. & Tauchmann, Harald, 2014. "Small Cash Rewards for Big Losers – Experimental Insights Into the Fight Against the Obesity Epidemic," Ruhr Economic Papers 530, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    17. Gunther Bensch & Michael Grimm & Jörg Peters, 2014. "Why Do Households Forego High Returns from Technology Adoption - Evidence from Improved Cook Stoves in Burkina Faso," Ruhr Economic Papers 0498, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    18. Eilers, Lea & Pilny, Adam, 2015. "The effect of financial incentives on weight loss: Documentation of data from a randomized experiment," RWI Materialien 99, RWI - Leibniz-Institut für Wirtschaftsforschung.
    19. Augurzky, Boris & Reichert, Arndt R. & Schmidt, Christoph M., 2012. "The Effect of a Bonus Program for Preventive Health Behavior on Health Expenditures," Ruhr Economic Papers 373, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    20. Kugler Franziska & Schwerdt Guido & Wößmann Ludger, 2014. "Ökonometrische Methoden zur Evaluierung kausaler Effekte der Wirtschaftspolitik," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 15(2), pages 105-132, June.
    21. 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.
    22. Eilers Lea & Pilny Adam, 2018. "Data from a Randomized Experiment: Financial Incentives on Weight Loss (RWI-Obesity)," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 238(6), pages 591-600, October.
    23. Arndt Reichert & Harald Tauchmann, 2012. "When Outcome Heterogeneously Matters for Selection – A Generalized Selection Correction Estimator," Ruhr Economic Papers 0372, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    24. Boris Augurzky & Thomas K.Bauer & Arndt R. Reichert & Christoph M. Schmidt & Harald Tauchmann, 2014. "Small Cash Rewards for Big Losers – Experimental Insights Into the Fight Against the Obesity Epidemic," Ruhr Economic Papers 0530, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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