Outcomes in a Program that Offers
Financial Rewards for Weight Loss
John Cawley
Joshua A. Price
Cornell University
Acknowledgement
 We would like to thank the Economic Research
Service of the USDA on Behavioral Economics
Research on Dietary Choice and Obesity
Weight Loss Attempts
 For obese, benefits of weight loss substantial:
 Health benefits of modest weight loss (defined as 5-10% of
starting weight) include decreased blood pressure and
cholesterol and a 25% reduction in mortality risk for type 2
diabetics (Vidal, 2002)
 Possible labor market benefits; e.g. healthy-weight white
females earn 11% more than obese white females (Cawley
2004)
 Healthy weight incur $125 lower annual out-of-pocket health
care costs than the obese; Finkelstein et al. (2003)
 In U.S., 46% of women and 33% of men trying to
lose weight (Bish et al. 2005)
 Most attempts at weight control fail; in one
community-based study of weight gain prevention
(Crawford et al., 2000):
 Most (53.7%) participants gained weight in the first twelve
months
 Three-quarters gained weight over three years
 Only 4.6% lost weight and maintained the loss for three years
Why do Most Weight Loss Attempts
Fail?
 Salience: benefits of weight loss are not salient
 Opportunity costs not visible so frequently overlooked (Bastiat
1850)
 Immediacy: benefits of weight loss are not necessarily
immediate
 The effectiveness of rewards declines with their delay from
time of choice; Ainslie (1975)
 Time inconsistency: time discounting may be
hyperbolic (Ainsley 1975)
 People want to lose weight but tend to succumb to temptation
 Thaler and Shefrin (1981) : decision-making is battle between
farsighted planner (who wants to diet and be active) and a
myopic doer (who wants to eat and be sedentary)
Financial Rewards for Weight Loss
May Offer Solution to These
Problems
 Salience: financial rewards can be known with
certainty in exchange for well-defined objectives
 Even small financial incentives can be effective because of
“bracketing” – tradeoffs considered in isolation, not compared
to income or wealth (Read et al. 1999; Kahneman and Tversky
1979)
 Immediacy: can be paid sooner than other benefits of
weight reduction may be realized
 Time-inconsistency: incentives can be structured to
serve as precommitment device to help people
overcome time-inconsistent preferences
 Forfeitable bonds effective because people exhibit loss
aversion – dislike losing own money more than like winning
other people’s money (Tversky and Kahneman 1991; Camerer
2005)
Our Project and Contributions
 Examine outcomes in a program that offers
various types of financial rewards for weight
loss
 Program features include: fixed payments, lotteries,
refundable bonds
 Outcomes we examine attrition and weight
loss (lbs, %)
 NIH (1993) recommends using attrition and weight
loss (e.g. 10% at 6 mos, 1 yr) to evaluate weight
loss interventions
 Also test hypotheses about who is most likely
to attrite, lose more weight
 Advantages over previous literature:
 Large sample (N=2,407)
 Long-term (1+ years)
 Real-world intervention
The Intervention
 Employer hires Company X to provide weight-loss




advice, document weight loss, pay incentives to
employees
Kickoff sessions: provide information, encourage signup
Baseline weigh-in: up to week after kickoff
Daily emails provide info about diet, portion size,
physical activity
Must weigh in once per quarter at kiosk located at
worksite
 Data uploaded to Company X and to enrollee’s personal
website
 Website: view own weight trajectory, chat room,
information resources
 Call center for live coaching
Standard Incentive Schedule:
Quarterly Payments
Weight Loss
(as % of Baseline Weight)
Dollar Reward Per Month
(Paid Quarterly)
1
1
2
2
3
3
4
4
5
5
10
10
15
15
20
25
25
35
30
50
Modified Incentive Schedule:
Lottery, Bond, and Bonuses
Weight Loss
(as % of Baseline Weight)
Greater than zero
Reward
(Lottery Quarterly, Year-End Payment)
Entered into quarterly drawing for gift
certificates: ten $50 gift cards each
quarter and ten $50 salon vouchers
each quarter.
5
Complete reimbursement of monthly
fees (11 * $9.95), paid at end of year
10
Complete reimbursement of monthly
fees (11 * $9.95) plus $100 bonus,
paid at end of year
“Biggest loser” (as % of baseline)
at worksite
$250 gift certificate, awarded at end of
year
Control Group
 Received all program elements (daily emails,
website resources, call center options,
quarterly weigh-ins)
 ….except were paid no incentives for weight loss
 Were paid $20 / year for weighing in quarterly
 Which presumably affects attrition, perhaps
enrollment
Variable Means by Group
Control
Standard
Incentives
(N=1,513)
Modified
Incentives
(N=765)
(N=129)
Male
16%
21%
36%
Age
46.5
43.0
44.1
Baseline BMI
32.9
32.8
31.3
Overweight
40%
38%
52%
Obese
31%
31%
26%
Morbidly Obese
29%
30%
22%
Variable
Research Questions
 What is attrition in such programs and
how does it vary with incentive
schedule?
 What is weight loss in such programs
and how does it vary with incentive
schedule?
Methods
 Attrition
 Report unconditional attrition rates, compare across
groups
 Estimate hazard model of attrition
 Weight Loss
 Report unconditional mean weight change (lbs, %
baseline)
 Estimate OLS regression of weight loss (lbs, %
baseline)
 Estimate Probit models of losing 5%, 10% of
baseline weight
Attrition
 Hypothesis I: those that are unsuccessful at
weight loss are more likely to drop out
 Rationale: selection, loss aversion
 Hypothesis II: lower attrition in programs that
require participants to post a refundable bond
 Rationale: selection, loss aversion
Attrition
Quarter
1
2
3
4
Standard
Incentives
(N=1,513)
0.512
0.621
0.720
0.764
Modified
Incentive
(N=765)
0.248
0.335
0.393
0.574
Control Group
(N=142)
0.256
0.395
0.450
0.481
Standard incentives group has higher attrition than in any published RCT
on financial rewards for weight loss – max was 57.9% at 13 months (PaulEbhohimhen and Avenuell, 2007)
Results from the Hazard Model
 Lagged weight loss reduces probability of
dropping out
 5% lower probability for each percent of baseline
weight lost
 Individuals in the standard incentive group are
twice as likely to drop out of the program as those
in the control group
 Modified incentive group are no more likely to drop
out than those in the control group
 Obese and morbidly obese are marginally more
likely to drop out than overweight individuals
Weight Loss
 Hypothesis I: Weight loss will be greater for those
who are offered financial rewards for weight loss
 Hypothesis 2: In quarters 1-3 weight loss will be
greater in standard incentive group than modified
incentive group, in quarter 4 weight loss is greater
in modified incentive group
Unconditional Mean by Group and
Quarter
Standard Incentive
Modified Incentive
Control Group
Quarter
Ignoring
Dropouts
Baseline CarryForward
1
4.6
2.2
4.2
3.2
3.4
2.6
[2.31%]
[1.13%]
[2.06%]
[1.55%]
[1.73%]
[1.29%]
5.5
2.1
4.9
3.3
3.1
1.9
[2.73%]
[1.04%]
[2.38%]
[1.58%]
[1.62%]
[0.98%]
7.8
2.2
4.1
2.5
3.0
1.7
[3.68%]
[1.03%]
[2.00%]
[1.21%]
[1.49%]
[0.82%]
6.1
1.4
8.4
3.6
3.2
1.7
[2.75%]
[0.64%]
[4.15%]
[1.77%]
[1.68%]
[0.87%]
2
3
4
Weight Loss in lbs.
[Percent weight loss]
Ignoring Baseline Carry- Ignoring Baseline CarryDropouts
Forward
Dropouts
Forward
OLS Estimates
 Standard incentive group lost more weight in
each quarter than the control group
 (1.6 to 4.4 lbs)
 (0.8 to 2.1 percentage points)
 Modified incentive group has no difference in
weight loss compared to control group until the
fourth quarter
 (4.8 lbs)
 (2.37 percentage points)
 Males lose more weight than females
 Morbidly obese lose more pounds but same
percentage as overweight individuals
Percent Losing 5% of Baseline Weight
Standard Incentive
Modified Incentive
Control Group
Quarter
Ignoring
Dropouts
Baseline CarryForward
Ignoring
Dropouts
Baseline CarryForward
Ignoring
Dropouts
Baseline CarryForward
1
14.1%
7.6%
16.5%
11.9%
11.9%
9.2%
2
19.4%
7.9%
23.8%
15.8%
13.2%
8.4%
3
24.9%
7.3%
23.0%
13.8%
26.5%
15.5%
4
24.3%
4.1%
45.7%
19.3%
23.4%
12.7%
Percent Losing 10% of Baseline Weight
Standard Incentive
Modified Incentive
Control Group
Quarter
Ignoring
Dropouts
Baseline CarryForward
Ignoring
Dropouts
Baseline CarryForward
Ignoring
Dropouts
Baseline CarryForward
1
1.9%
1.0%
2.7%
1.9%
0.9%
0.7%
2
4.8%
2.0%
6.5%
4.3%
4.4%
2.8%
3
9.0%
2.6%
6.8%
4.1%
6.0%
3.5%
4
9.8%
1.7%
16.5%
6.9%
7.8%
4.2%
Probit Results
 Modified incentive group was 27.2 percent more
likely to lose 5% of weight than the control group
 No significant difference in probability of losing
5% of baseline weight between standard and
control group
 No significant difference in probability of 10%
weight loss between standard and modified
groups compared to control group
 Modified group significantly more likely than
standard group to lose 10% of baseline weight
Conclusion
 Attrition
 Those that are unsuccessful at weight loss are
more likely to drop out
 Lower attrition in programs that require participants
to post a refundable bond
 Weight Loss
 Weight loss is greater for those who are offered
financial rewards for weight loss
 In quarters 1-3 weight loss will be greater in
standard incentive group than modified incentive
group, in quarter 4 weight loss is greater in modified
incentive group
Suggestions on How to
Modify Such Programs
 Program should reward loss of fat, not weight
 BMI / pounds poor measure of fatness (Burkhauser and
Cawley 2008)
 Current program has disincentive for muscle-building exercise
 Pay immediately and often; Ainslie (1975)
 More frequent weigh-ins with immediate gratification
 Should always allow posting of bonds
 Requiring them discourages sign-up (Jeffrey 1978)
 Large single payment may be better than monthly fees
 Consider paying for participation
 Control group paid $20 for the year had lower attrition than the
standard incentives group
 Beware unintended consequences
 Employer with “modified” incentives discovered employees
were using unhealthy methods to achieve weight loss just
before quarter 4; revised program for the next year