Putting your money where your butt is

This paper (that I learned about indirectly by reading an Andrew Leigh post) by Xavier Gine, Dean Karlan & Jonathon Zinman uses short-term incentives to deter people from smoking. It is an intriguing idea:

Abstract: We designed and tested a voluntary commitment product to help smokers quit smoking in the Philippines. Individuals who sign a Committed Action to Reduce and End Smoking (CARES) contract deposit money into a savings account and agree to let the bank forfeit their entire balance to charity if they fail a urine test for nicotine and cotinine six months later. Bank marketers offered the product by approaching smokers in public places. Marketers administered a short survey, provided a standard pamphlet with information on smoking’s harmful effects and how to quit, and then made one of three randomly assigned offers: (i) CARES; (ii) aversive “cues”: graphic, pocket-sized pictures of the deleterious health effects of smoking, modeled on Canada’s cigarette packaging mandate; (iii) no intervention (control group). 11 percent of individuals offered CARES accepted. 6 months after marketing, the bank marketing team returned and administered urine tests to participants from all three groups. Subjects offered CARES were 3.1 percentage points more likely to pass the test than the control group (a 38.8% increase); this intent-to-treat effect rises to 4.3 percentage points for those who reported in the baseline survey that they wanted to quit smoking at some point in their lives. Treatment-on-the treated estimates suggest that those who signed a CARES commitment were 29 and 33 percentage points more likely to pass the test than the control group.

This proposal has advantages over the one I analysed a few weeks ago which simply gave rewards to those who abstained from smoking. This scheme isolates those with specific incentives to quit. It is less open to manipulation.