The Behavioralist Goes to School: Leveraging Behavioral Economics to Improve Educational Performance

46 Pages Posted: 16 Jun 2012

See all articles by Steven D. Levitt

Steven D. Levitt

University of Chicago; National Bureau of Economic Research (NBER); American Bar Foundation

John A. List

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Susanne Neckermann

University of Zurich - Department of Economics

Sally Sadoff

University of California, San Diego (UCSD) - Rady School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: 2012

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.

Suggested Citation

Levitt, Steven D. and List, John A. and Neckermann, Susanne and Sadoff, Sally, The Behavioralist Goes to School: Leveraging Behavioral Economics to Improve Educational Performance (2012). ZEW - Centre for European Economic Research Discussion Paper No. 12-038, Available at SSRN: https://ssrn.com/abstract=2084718 or http://dx.doi.org/10.2139/ssrn.2084718

Steven D. Levitt

University of Chicago ( email )

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National Bureau of Economic Research (NBER)

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American Bar Foundation

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John A. List

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Susanne Neckermann (Contact Author)

University of Zurich - Department of Economics ( email )

Zuerich, 8006
Switzerland

Sally Sadoff

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

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