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The Science Behind Vaccine Incentives

ARI SHAPIRO, HOST:

Many Americans are still hesitant to get a COVID-19 vaccine. Some businesses and local governments are spending big money to change that. Corporations like Walmart, Dollar General and Kroger supermarkets are offering cash stipends for vaccinated employees, while states like Maryland, Colorado and Ohio have announced lotteries with huge cash prizes for people who've received shots.

To talk about which of these incentives work best and why, we are joined by behavioral economist Katy Milkman a professor at the University of Pennsylvania's Wharton Business School.

Welcome.

KATY MILKMAN: Thank you for having me. I'm excited to be here.

SHAPIRO: You've been doing real-world research on this. You're helping states and health providers design vaccine incentives. So what have you learned so far about the things that work?

MILKMAN: Well, there's a lot of research that's been done before with different kinds of decisions showing that lotteries are highly motivating if you're trying to convince someone to change a behavior. And people overweight the very low probabilities of winning a lottery, and as a result of that, they get very excited about the potential for this grand prize. It draws a lot of media attention, so there's free marketing. And those two things together appear to drive a lot of behavior change, and there's lots of research supporting that in the past.

SHAPIRO: What else has your research shown about the kinds of incentives that are more effective?

MILKMAN: Well, there's a couple of really interesting things about lottery incentives that can make them, it seems, more effective. One is that you don't need a huge jackpot. Actually, if you look at the way lotteries are typically run, there's normally some smaller prizes included that you have a better chance of winning. And one of the reasons for that is that it starts to feel more realistic. And that's research by Kevin Volpe and his group at the Center for Health Incentives and Behavioral Economics at Penn has shown that. There's also really interesting research on the power of what's called a regret lottery, and Kevin has also led some of this work.

What a regret lottery does is imagine if everyone in a state is eligible. We draw a name. And then we tell you, hey, did you get vaccinated? If you did, you won a million dollars. If you didn't, sorry, you're not going to give that million, but you'll know you would have if only you'd made a different decision. So you can see now why it's called a regret lottery.

SHAPIRO: Wow.

MILKMAN: Exactly. People are going to really regret it, they recognize, if their name is drawn and they turn out to be ineligible because they didn't take the action.

SHAPIRO: How persuasive are these incentives? I mean, can they make people who are opposed to getting the vaccine decide to get the shot anyway, or is it pretty much just people who are on the fence?

MILKMAN: If someone is adamantly opposed to vaccination, they have a strong reason that they would never get a vaccine, paying them $100 is very unlikely to change their minds. But what we've seen in survey data is that there's a lot of people who are in what I'll call the movable middle. They're not adamantly opposed. The fraction of the population who's adamantly opposed to getting any kind of vaccine is actually fairly small. I've seen estimates ranging from 5- to 15%, but it's not huge.

SHAPIRO: Oh, wow.

MILKMAN: The focus is not on the adamant folks who are absolutely against it, it's rather on everyone else.

SHAPIRO: I know your research has also dug into the kinds of messages that are most motivating for people. What have you found works best?

MILKMAN: Yeah. We spent a lot of time in the last year testing different messages to encourage people to get a vaccine. And we actually tested these on flu vaccines last fall. The messages that focused on a vaccine being reserved for you or waiting for you outperformed others such as telling you the kinds of people who get a vaccine tend to be wealthier and better educated. Don't you want to join that group, or a simple message that shares a joke about getting the flu. You don't want to spread this one around.

So we really value things that we own or that we feel belong to us. This is a phenomenon economists call the endowment effect. We overvalue our possessions relative to other things. We don't want to lose them. It also implies that this is the default, which means other people expect this. They're recommending it, in fact. And maybe most people are following this guidance. And since it's assumed that I'll want it, they've reserved it for me, and it must be the case that I probably should want it. All of that psychology combined is probably part of what's propping it up.

SHAPIRO: Katy Milkman is a professor at Penn's Wharton Business School, and her new book is called "How To Change."

Thank you.

MILKMAN: Thank you so much for having me. Transcript provided by NPR, Copyright NPR.