Ruhr Economic Papers

Ruhr Economic Papers #368

Does Money Burn Fat? – Evidence from a Randomized Experiment

by Boris Augurzky, Thomas K. Bauer, Arndt R. Reichert, Christoph M. Schmidt and Harald Tauchmann

RWI, RUB, 09/2012, 42 S./p., 8 Euro, ISBN 978-3-86788-423-5 DOI: 10.4419/86788423



We test whether financial incentives have an effect on weight reduction in a randomized controlled trial involving 700 obese persons assigned to three experimental groups. While two treatment groups obtain Euro150 and Euro300, respectively, for achieving an individually assigned target weight within four months, a control group receives no such premium. The results indicate that the weight losses for the treatment groups are 2.6 and 2.9 percentage points higher than that achieved by the control group, raising the average total weight loss for the incentivized groups to 5 percent of the initial weight. This percentage is typically regarded as a threshold to improve the health status of the obese. Further evidence indeed indicates some health improvements. The higher reward causes only the group of obese women to lose more weight. Overall, the results suggest that financial incentives can motivate people to lose weight significantly.

JEL-Classification: I10, I18, H23, C93

Keywords: Randomized experiment; financial incentives for weight loss; obesity; nonrandom sample attrition; effect heterogeneity