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The Behavioralist Goes to School: Leveraging Behavioral Economics to Improve Educational Performance

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Listed:
  • Steven D. Levitt
  • John A. List
  • Susanne Neckermann
  • Sally Sadoff

Abstract

We explore the power of behavioral economics to influence the level of effort exerted by students in a low stakes testing environment. We find a substantial impact on test scores from incentives when the rewards are delivered immediately. There is suggestive evidence that rewards framed as losses outperform those framed as gains. Nonfinancial incentives can be considerably more cost-effective than financial incentives for younger students, but are less effective with older students. All motivating power of incentives vanishes when rewards are handed out with a delay. Our results suggest that the current set of incentives may lead to underinvestment.

Suggested Citation

  • Steven D. Levitt & John A. List & Susanne Neckermann & Sally Sadoff, 2016. "The Behavioralist Goes to School: Leveraging Behavioral Economics to Improve Educational Performance," American Economic Journal: Economic Policy, American Economic Association, vol. 8(4), pages 183-219, November.
    • Handle: RePEc:aea:aejpol:v:8:y:2016:i:4:p:183-219
    Note: DOI: 10.1257/pol.20130358
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    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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