IBSS: The Influence of Short-Term Financial Incentives on Social Norms and Behaviors

Michigan State University, East Lansing MI

Investigators

Abstract

This interdisciplinary research project focuses on the effects of short-term monetary incentives on social systems and on longer-term behavior. In many nations, there is a movement towards incentive-based programs to promote environmental conservation, vaccination, school attendance, and other socially desirable behaviors, but most such programs are government-or donor-funded, with budgets subject to political processes and availability of funds. This makes them vulnerable to elimination, raising the question of what will happen to behaviors afterward. Economic models that drive the design of such programs are ill-equipped to address this question. Some evidence suggests that financial incentives can undermine or "crowd out" other sources of motivation derived from social norms, but the reasons are poorly understood. Although communication science has the potential to explain the effects of social norms and other psycho-social factors on behaviors, it has not incorporated the effects of monetary payments. This project will integrate economic models and theories of the influence of social norm to explain and predict the ways in which monetary incentives influence social norms and behaviors. The researchers will base their work in Sanjiangyuan, a Chinese region in southern Qinghai Province on the Tibetan Plateau. They will use interviews and surveys with research subjects to develop culturally specific quantitative measures of social norms and related variables. They will conduct a series of field experiments to test the causal linkages posited among communication, monetary incentives, social norms, and behaviors, and they will translate theoretical and empirical results to offer possible policy modifications for the design of incentive-based environmental conservation programs in the study region and elsewhere. This project will provide new information and insights that will advance basic knowledge and help improve the design of incentive-based environmental conservation programs through a better understanding of their effects. By integrating elements of economic theory and communication theory, the researchers will improve societal understanding of how financial incentives and social norms interact to influence behavior. Results from preliminary experiments demonstrate the advantages of incorporating constructs from both economic and communication theories in explaining and predicting behavior. This project has the potential to explain, predict, and overcome the motivation crowding out effects of monetary incentives. The study region provides a compelling social, ecological, and political system for addressing the study hypotheses because of a strong existing conservation ethic among the Tibetan people and the potential introduction of a large-scale payment-for-ecosystem-services program. By helping project managers and policy makers understand how motivation crowding out operates, this project will help make the next generation of environmental incentive-based social programs be more effective. This project is supported through the NSF Interdisciplinary Behavioral and Social Sciences Research (IBSS) competition.