From the Guidelines
Economic incentives play a crucial role in promoting healthy behavior by providing tangible rewards that motivate people to make better health choices, as evidenced by the most recent and highest quality study available 1. The use of economic incentives, such as subsidies, taxes, and financial rewards, can effectively encourage individuals to adopt healthier lifestyles. For example, employers can offer wellness program incentives like cash bonuses or reduced insurance premiums for employees who quit smoking, maintain a healthy weight, or participate in regular health screenings. Government policies, such as taxes on unhealthy products or subsidies for nutritious foods, can also shift population-wide behavior by making healthy options more financially attractive. Some key points to consider when implementing economic incentives for healthy behavior include:
- The magnitude of the dietary change correlates with the size of the price difference, with certain population subgroups, such as youth and lower socioeconomic populations, being especially sensitive to economic incentives 1.
- Economic incentives can be used to promote physical activity, such as through tax incentives for purchasing exercise equipment or increasing gas prices to encourage active commuting 1.
- The effectiveness of economic incentives stems from basic behavioral economics principles, where people respond to immediate, concrete rewards more reliably than to abstract future health benefits 1.
- Incentives work best when combined with education about health benefits and when designed to foster intrinsic motivation that can sustain healthy behaviors even after the external rewards end 1. Overall, economic incentives can be a powerful tool in promoting healthy behavior, and their use should be considered as part of a comprehensive approach to improving public health.
From the Research
Economic Incentives and Healthy Behavior
The role of economic incentives in promoting healthy behavior is a topic of increasing interest in the fields of public health and behavioral economics.
- Economic incentives can be an effective strategy for influencing health behaviors, with studies showing that they can promote desirable health behaviors and discourage unhealthy ones 2, 3, 4.
- The use of financial incentives to promote healthy behavior is based on the principle that individuals will make choices that maximize their economic well-being, and that incentives can be designed to encourage healthy behaviors 5.
Key Principles for Effective Incentives
Research has identified several key principles for designing effective incentives to promote healthy behavior, including:
- Identifying the desired outcome and the behavior change that will lead to it 5
- Determining the potential effectiveness of the incentive in achieving the behavior change 5
- Linking a financial incentive directly to the outcome or behavior 5
- Identifying possible adverse effects of the incentive 5
- Evaluating and reporting changes in behavior or outcome in response to the incentive 5
Tailoring Incentives for Healthy Behaviors
Tailoring financial incentives to individuals' goals, values, and aspirations may improve their efficacy in promoting healthy behaviors 6.
- This approach integrates insights from self-determination theory and behavioral economics to design incentives that promote autonomous motivation for healthy behaviors 6.
- Tailored incentives may be more effective than standard incentives in promoting sustained health improvements, particularly among at-risk employees 6.
Effectiveness of Economic Incentives
Studies have shown that economic incentives can be effective in promoting healthy behaviors, particularly in the short run and for simple preventive care 4.
- Economic incentives have been shown to work 73% of the time, with higher success rates for simple preventive care and distinct, well-defined behavioral goals 4.
- However, the size and type of incentive matter, with incentives that increase ability to purchase preventive services working better than more diffuse incentives 4.