Reducing Health Care Costs for Employers – Financial Incentives for Company Gym Use

Publication Date

11-19-2007

Grant Type

Early Career Research Award

Description

Obesity-related medical expenditures and absenteeism cost employers with at least 1000 employees an estimated $285,000 per year (Finkelstein et. al, 2005). In light of these future high costs, many large employers in the U.S. are developing wellness or incentive-based fitness programs. Yet, despite the potential importance of these programs, there has been surprisingly little research assessing the effectiveness and optimal structure of financial incentives for exercise and other healthy behaviors. This study evaluates the effectiveness of various financial incentives offered to employees at Sherwin-Williams, a leading paint manufacturer in Cleveland, Ohio. One thousand subjects were divided into four randomized treatment groups, each given different types and levels of financial incentives for use of the company’s fitness center over a period of one month. Research assessed changes in exercise habits, therefore evaluating the effectiveness of the various financial incentives offered.

Grant Product

Royer, Heather, Mark Stehr, and Justin R. Sydnor. 2012. "Incentives, Commitments and Habit Formation in Exercise: Evidence from a Field Experiment with Workers at a Fortune-500 Company." National Bureau of Economic Research Working Paper No. 18580. https://www.nber.org/papers/w18580

Royer, Heather, Mark Stehr, and Justin Sydnor. 2015. "Incentives, Commitments, and Habit Formation in Exercise: Evidence from a Field Experiment with Workers at a Fortune-500 Company." American Economic Journal: Applied Economics 7(3): 51-84. https://doi.org/10.1257/app.20130327


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