December 15, 4 p.m. (17 Malaya Ordynka, room 305). NES CSDSI & HSE ICSID Research Seminar: Dagmara Celik Katreniak (RANEPA). “Dark side of incentives: a randomized field experiment in Uganda”. Registration >>> (till 1 p.m. December 15).
Throughout our lives, we are routinely offered different incentives as a way to motivate us, such as absolute and relative performance feedback, and symbolic, reputation or financial rewards. Many researchers have studied the effects of one or more of these incentives on how people change their performance. However, there can also be important psychological outcomes in terms of stress and happiness. The current paper contributes to the literature by explicitly accounting for this performance-versus-well-being tradeoff introduced by incentives. I implement two types of social comparative feedback regimes, within and across-class group comparisons, and two types of incentive regimes, financial and reputation rewards. The results show that rewards can lead to an increase in student performance up to 0.28 standard deviations (depending on whether students received feedback and what type), but at a cost of higher stress and lower happiness, whereas comparative feedback alone (without rewards) increases performance only mildly, by 0.09 to 0.13 standard deviations, but without hurting student well-being. More stressed students exert less effort, perform worse and attrite by 29 percent more compared to those who are stressed minimally. Furthermore, the results help to identify gender-specific responses to different incentive schemes. Boys strongly react to rewards with or without feedback. In contrast, girls react to rewards only if they are also provided with feedback. Finally, the paper contributes to the expanding literature on incentivized interventions in developing countries by using a rich dataset of more than 5000 primary and secondary school students in Uganda, who were repeatedly tested and interviewed over a full academic year.