Overview

Financial incentives, such as fines, taxes, and subsidies, are frequently employed by policymakers to encourage behaviors that benefit the public good. This study, conducted in Germany, evaluates how accurately policymakers predict the impact of offering a 20 Euro financial incentive on COVID-19 vaccine uptake. This study involves surveying politicians on incentive impact, and conducting a randomized controlled trial with 41,548 residents in Ravensburg. While politicians predicted, on average, that offering a financial incentive would result in a 15.3 percentage point increase in vaccine uptake, the field experiment found no effect. Common use of and confidence in financial incentives persists despite academic literature revealing mixed-results. The study recommends educating policymakers on the potential pitfalls of financial incentives, particularly noting that such incentives are more likely to fail when they are too small or aimed at behaviors that contribute to the public good.

Approach

This study was conducted in collaboration with the town of Ravensburg, Germany as a part of their campaign to increase COVID-19 vaccination and booster shot rates. The study conducted a randomized controlled trial involving 41,548 adult residents of Ravensburg, Germany in November and December, 2021. In this trial, residents were sent a letter inviting them to be vaccinated at one of seven vaccination events. A randomly selected intervention group of 5,016 residents were sent the letter with additional language offering a financial incentive of 20 Euro. Policymakers of medium-to-large towns in Germany were surveyed to predict how offering this financial incentive would impact vaccine uptake. Of the 88 respondents, policymakers predicted, on average, that incentives would increase vaccine uptake by 15.3 percentage points. The field study found incentives had no effect on vaccine uptake, revealing an over-prediction by policymakers on the impact of financial incentives.

Figure 1: Randomized Control Trial of the Effect of a Financial Incentive on COVID-19 Vaccination. (A) Timeline of the invitations and events. (B) Map of Ravensburg indicating the location of the vaccination events. (C) Reproductions of the invitation letters. Left: Letter sent to the intervention group. The text associated with the incentive is highlighted in yellow. Right: Letter sent to the control group, which is identical except that it omits text associated with the financial incentive.

Figure 2: Policy Makers’ Estimates of the Effects of Financial Incentives Compared to the Actual Effects of the Incentive.