Vol 11, No 3 (2023)
Estimating the Size of Cash Rewards in Health Interventions: The Ex-ante Willingness to Exert Effort
Antonio J. Trujillo, Hossein Zareb, Larissa Jennings Mayo-Wilsonc, Maria Amalia Pesantesd, Francisco Diez Cansecod, Jaime J. Mirandad
Abstract
This paper proposes a method to estimate the optimal size of cash rewards in health interventions. We adapt a theoretical model in which an individual chooses effort to maximize utility. Effort is costly but it provides intrinsic satisfaction that adds to the external cash reward. We considered alternative functional forms for the cost function and tested the model using data from hypothetical reward schemes to motivate individuals with diabetes to exert effort to lose weight. The value of intrinsic motivation, the curvature of the cost of effort, and the value elasticity of effort are estimated using a Nonlinear Least Squares procedure as well as a Minimum Distance approach. Results indicate that effort is rather inelastic to the size of the reward and that a high curvature of the cost of effort prevents individuals from engaging in healthy behavior.
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Keywords
Intrinsic motivation; Diabetes; Stated willingness to accept; Stated willingness to deposit.
Publication information
Volume 11, Issue 3
Year of Publication: 2023
ISSN: 1857 - 8721
Publisher: EDNOTERA
How to cite
Trujillo, A.J. Zareb, H., Mayo-Wilsonc, L.J., Pesantesd, M.A., Cansecod, F. D., Mirandad, J.J.: Estimating the Size of Cash Rewards in Health Interventions: The Ex-ante Willingness to Exert Effort. Journal of Applied Economics and Business, Vol 11, No. 3, 25-45. (2023)