Do Prize-Linked Incentives Promote Positive Financial Behavior? Evidence from a Debt Reduction Intervention

47 Pages Posted: 6 Nov 2019

See all articles by Jeremy Burke

Jeremy Burke

Center for Economic and Social Research (CESR)

Date Written: April 22, 2019

Abstract

Prize-linked programs are becoming increasingly popular, yet little evidence exists regarding their efficacy. I conduct the first field experiment examining whether prize-linked incentives can be effective in promoting debt reduction by randomizing access among 6,907 borrowers in a debt management plan. I find strong take-up of the program and that takers were timelier with repayment and paid off more debt. However, intent-to-treat estimates are precise zeros. These results suggest that despite strong interest and positive correlations, prize-linked incentives may not modify behavior and may simply attract individuals who are ex-ante likely to engage in the target behavior.

Suggested Citation

Burke, Jeremy, Do Prize-Linked Incentives Promote Positive Financial Behavior? Evidence from a Debt Reduction Intervention (April 22, 2019). Available at SSRN: https://ssrn.com/abstract=3376157 or http://dx.doi.org/10.2139/ssrn.3376157

Jeremy Burke (Contact Author)

Center for Economic and Social Research (CESR) ( email )

635 Downey Way
Los Angeles, CA 90089-3332
United States

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