Does Money Burn Fat? Evidence from a Randomized Experiment

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.

Number of Pages in PDF File: 42

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

JEL Classification: I10, I18, H23, C93

working papers series