Towards an understanding of the welfare effects of nudges: Evidence from a field experiment in Uganda

E.H. Bulte; J. List; Daan van Soest

doi:10.1093/ej/ueaa054

Towards an understanding of the welfare effects of nudges: Evidence from a field experiment in Uganda

E.H. Bulte, J. List, Daan van Soest

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

Social scientists have recently explored how framing of gains and losses affects productivity. We conducted a field experiment in peri-urban Uganda, and compare output levels across 1000 workers over isomorphic tasks and incentives, framed as either losses or gains. We find that loss aversion can be leveraged to increase the productivity of labor. The estimated welfare costs of using the loss contract are quite modest – perhaps because the loss contract is viewed as a (soft) commitment device.

Original language	English
Pages (from-to)	2329-2353
Journal	Economic Journal
Volume	130
Issue number	632
DOIs	https://doi.org/10.1093/ej/ueaa054
Publication status	Published - Nov 2020

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10.1093/ej/ueaa054Licence: CC BY-NC

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abstract = "Social scientists have recently explored how framing of gains and losses affects productivity. We conducted a field experiment in peri-urban Uganda, and compare output levels across 1000 workers over isomorphic tasks and incentives, framed as either losses or gains. We find that loss aversion can be leveraged to increase the productivity of labor. The estimated welfare costs of using the loss contract are quite modest – perhaps because the loss contract is viewed as a (soft) commitment device. ",

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