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How Monetary Incentives Impact Social Norms


Maria Lapinski, a communication scientist in the Department of Communication, and John Kerr, a researcher with a focus on economics from the Department of Community Sustainability, are studying how financial incentive programs influence behavior and social norms. Alongside Jinhua Zhao, an MSU AgBioResearch scientist and researcher in the Department of Agricultural, Food and Resource Economics, they have been working on a project in Sanjiangyuan, China, a region in the Qinghai Province on the Tibetan Plateau.

Sanjiangyuan will soon be a part of China’s payment for ecosystems services program. It is ecologically important because it holds the headwaters of Asia’s three largest rivers: the Yellow, the Yangtze and the Mekong.

Phase One: Living with Nature

Close to 1 million people inhabit the region, with roughly 90 percent being ethnic Tibetans and having a strong tie with Tibetan Buddhism. Interviews conducted by the project team found that inhabitants have depended on herding sheep and yaks for years, which, along with their cultural beliefs, has created a desire to live harmoniously with nature. This was found in the first phase of the project, which included interviews with 80 nomadic herders.

“These payments for ecosystems services happen all over the world, including right here in Michigan,” Lapinski said. “What we know from financial research is that once you start incentivizing certain behavior with money, it can change the way people think about that behavior. We know that money can erode psychological motivation and attitudes, but we know less about how money can change the whole social system and what we call social norms.”

Phase Two: Measuring Social Norms

Phase two of the project involves household surveys that yield quantitative data, such as measures of social norms and responses to hypothetical scenarios, as well as income and education levels. The data will represent how social norms, coupled with financial incentives, affect conservation behaviors, with a particular focus on grazing management and protection against illegal hunting. Data is being collected currently.

Phase Three: Introducing Financial Incentives

In the summer of 2016, the final phase, which includes field experiments, will take place. These studies will simulate the introduction of financial incentive programs while accounting for cultural context and social norms about herding and illegal hunting.

“In the experiment phase, we want to really understand how they feel about conservation and how that changes when an incentive program is introduced,” Kerr said. “We started the project with experiments on campus with MSU students dealing with cooperation. Individuals were placed in a group setting with four people and put in a scenario where they have to take an action that is best for them or best for the group. We introduced variables in the second phase, such as adding an incentive to cooperate that made it at least as beneficial to cooperate as not cooperate. In the third phase, we took that payment away.”

“One of the things we found in the first experiments was that financial incentives can erode the power of norms,” Lapinski said. “In other words, we sometimes feel pressure to do what others are doing, but when financial incentives are involved, that tends to be less of a factor in decision making. One of the interesting things about the next phase is that we’re taking this to a new culture. We aren’t sure if we’ll find the same things, but we have some insights into what can happen.

“If there is money from a government entity or a nonprofit, it will run out, so what happens then? Our prediction is that if you introduce a financial incentive, it will erode positive social norms once that incentive is taken away. That’s what we’re looking at and what we want to include in our experiments next summer. Then we can take the last step and think about how payment programs can be designed to avoid ruining existing social norms.”

The project is funded by the National Science Foundation’s Interdisciplinary Behavioral and Social Sciences Research competition, in addition to the Sustainable Michigan Endowed Partnership at MSU.

– excerpted from Cameron Rudolph via AgBioResearch

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