Social and Financial Incentives for Overcoming a Collective Action Problem

43 Pages Posted: 27 Sep 2021 Last revised: 16 Jan 2025

See all articles by M. Mehrab Bakhtiar

M. Mehrab Bakhtiar

International Food Policy Research Institute

Raymond Guiteras

North Carolina State University; University of Maryland

James Levinsohn

Yale University - Cowles Foundation

Ahmed Mushfiq Mobarak

Yale School of Management; Yale University - Cowles Foundation

Date Written: September 2021

Abstract

Addressing public health externalities often requires community-level collective action. Each person’s sanitation behavior can affect the health of neighbors. We report on a cluster randomized controlled trial conducted with 19,000 households in rural Bangladesh where we randomized (1) either group financial incentives or a non-financial “social recognition” reward, and (2) asking each household to make either a private pledge or a public pledge to maintain hygienic latrines. The group financial reward has the strongest impact in the short term (3 months), inducing a 7.5-12.5 percentage point increase in hygienic latrine ownership. Getting people to publicly commit to maintaining and using a hygienic latrine in front of their neighbors induced a 4.2-6.1 percentage point increase in hygienic latrine ownership in the short term. In the medium term (15 months), the effect of the financial reward dissipates while the effect of the public commitment persists. Neither social recognition nor private commitments produce effects statistically distinguishable from zero.

Suggested Citation

Bakhtiar, M. Mehrab and Guiteras, Raymond and Guiteras, Raymond and Levinsohn, James and Mobarak, Ahmed Mushfiq, Social and Financial Incentives for Overcoming a Collective Action Problem (September 2021). NBER Working Paper No. w29294, Available at SSRN: https://ssrn.com/abstract=3931817

M. Mehrab Bakhtiar (Contact Author)

International Food Policy Research Institute ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Raymond Guiteras

North Carolina State University ( email )

Hillsborough Street
Raleigh, NC 27695
United States

University of Maryland

College Park
College Park, MD 20742
United States

James Levinsohn

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

Ahmed Mushfiq Mobarak

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-432-5787 (Phone)

HOME PAGE: http://mba.yale.edu/faculty/profiles/mobarak.shtml

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

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