Financial Rewards for College Students Could Help Curb the Pandemic

A new study suggests ways of structuring payments to persuade even impulsive students to behave more cautiously

By Seema Jayachandran She is an economics professor at Northwestern University. Excerpts:

"There are several ways such programs might work:

• A university might announce that each week that students test negative, they will be paid $50. Once they tested positive, they would no longer be eligible for rewards.

• The rewards could be structured as a one-time payment of $700 at the end of a 14-week semester if students test negative every week.

• In a blend of these two options, students could receive $350 if they stayed negative for the first half of the term, then another $350 for staying negative for the second half.

Higher or lower sums might be preferred. The important thing is to find incentives that motivate as many students as possible in order to protect the broader population.

Rewards programs that pay people to be diligent about their health are already common. Many companies offer employees money if they exercise regularly, and addiction clinics pay people who stay drug-free."

In their study, the economists Shilpa Aggarwal of the Indian School of Business, Rebecca Dizon-Ross of the University of Chicago and Ariel Zucker at Berkeley experimented with an incentive program in India that encouraged diabetic adults to walk at least 10,000 steps a day. They found that several methods were successful in boosting exercise and improving health.

The economists found that an all-or-nothing contract — for example, paying students only if they stayed Covid-negative the whole term — worked especially well for people who hate to sacrifice short-term pleasure. Those are exactly the type of people who might be reckless in their social life and whose risky behavior a college would want to curtail.

The study measured how much each person was willing to sacrifice in the future to avoid a sacrifice today. Some people put a steep discount on whatever happened in the future, whether good or bad. These so-called impatient people want to have fun today and to push off unpleasant activities until later.

The researchers assigned the adults in India to one of two incentive contracts. Under the first, participants earned a reward each day they hit 10,000 steps. Under the second, they earned a reward only if they walked 10,000 steps at least five times in a week.

The researchers found that the second contract — what they call a “time-bundled” incentive — increased exercise more for people who were especially impatient.

It turned out that while it was hard for such people to sacrifice immediate pleasure, it was also true that forgoing pleasure in the future didn’t seem all that bad to them.

The clever feature of “time-bundled” contracts is that they persuade people to do something they dread by tying it to something that seems great. For a college student it might be very appealing to get a lot of money in exchange for a series of low-key Fridays in the future. The attractiveness of the overall bundle can persuade an impatient person to forgo short-term temptations, like going to a party tonight."