Rebates as Incentives: The Effects of a Gym Membership Reimbursement Program

Tatiana Homonoff, Barton Willage, and Alexander Willen

Can financial incentives induce healthy behaviors? We examine this question by evaluating a large-scale wellness program at a major American university. The program offers gym membership reimbursements for students who attend the gym at least 50 times in a six-month period. Our analysis exploits individual-level administrative data on daily gym attendance for the universe of students over a five-year period: the three years that the policy was in place, one year before implementation, and one year after termination. This provides us with 100,000 student-year observations and 1.5 million gym visits. Using a combination of bunching methods and difference-in-difference strategies, we provide four empirical results. First, we document significant bunching at the 50-visit threshold in years when the policy is in place. Second, we show that this effect translates into a statistically significant and economically meaningful increase in gym attendance: the program increased average gym visits by almost five visits per semester, a 20% increase from the mean. Third, we show that the policy not only motivated students who were previously near the threshold, but that it increased attendance across the entire visit distribution. Finally, we show that approximately 50% of the effect persists after program termination, providing strong evidence of habit formation. Taken together, these results suggest that rebate-framed incentives with a high attendance threshold can successfully induce healthy behaviors in the short-term, and also create new habits in the long-run.

Wagner Faculty