When and Why Incentives (Don’t) Work to Modify Behavior

ARTICLE SUMMARY

The paper/article discusses the role and impact of incentives in the education sector. It is generally believed that monetary or extrinsic incentives can bring about the desired change in human behavior; however, studies suggest that this change in behavior, because of extrinsic incentives, could be temporary and may not be able to bring the permanent change (desired) in behavior. In the first section of the paper, the author asserts (based on the evidence) that incentives may yield crowding-out-effect. For instance, monetary incentives may reduce or diminish other motives or incentives to perform a task or deliver an obligation. Also, in the short run an individual may change his/her behavior because of the incentive(s) (extrinsic incentives producing the desired result), but in the long run, incentives produce mixed results.

Studies on the effectiveness of monetary incentives for students that aim to achieve set targets reveal that some extrinsic incentives are more effective than others. Also, they also reveal that some extrinsic incentives are effective in schools, while others in colleges. For instance, incentives for higher attendance and enrollment produced desired results at the school level. However, the monetary or extrinsic incentives to improve academic achievements only produced results for a particular subject (math) (Gneezy, Meier and Rey-Biel).

OPINION

It is quite apparent that incentives in the education sector work slightly differently than the incentives that are meant for industries and markets (goods and services). It is also evident that for a particular objective, extrinsic incentives must be designed with great caution. Also, those who are offering incentives must know what type of incentive will have what sort of impact, both in the short and long run. It is also essential to consider the consequence of removing or eliminating the incentive in the near or distant future. It is true that most of the monetary or extrinsic incentives work in the short run; however, they mostly fail to realize long-term objectives (cannot bring permanent change (positive) in behavior.

Work Cited

Gneezy, Uri, Stephan Meier and Pedro Rey-Biel. “When and Why Incentives (Don’t) Work to Modify Behavior.” Journal of Economic Perspectives 25.4 (2011): 191-210.