Enhancing the Efficacy of Teacher Incentives through Loss Aversion: A Field Experiment

Roland Fryer (), Steven Levitt, John List and Sally Sadoff

No 18237, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Domestic attempts to use financial incentives for teachers to increase student achievement have been ineffective. In this paper, we demonstrate that exploiting the power of loss aversion--teachers are paid in advance and asked to give back the money if their students do not improve sufficiently--increases math test scores between 0.201 (0.076) and 0.398 (0.129) standard deviations. This is equivalent to increasing teacher quality by more than one standard deviation. A second treatment arm, identical to the loss aversion treatment but implemented in the standard fashion, yields smaller and statistically insignificant results. This suggests it is loss aversion, rather than other features of the design or population sampled, that leads to the stark differences between our findings and past research.

JEL-codes: J24 (search for similar items in EconPapers)
Date: 2012-07
New Economics Papers: this item is included in nep-cbe and nep-exp
Note: ED LS
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Citations: View citations in EconPapers (174)

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Working Paper: Enhancing the Efficacy of Teacher Incentives through Loss Aversion: A Field Experiment (2012)
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