DP11137 | Using Preference Estimates to Customize Incentives: An Application to Polio Vaccination Drives in Pakistan

Publication Date

02/26/2016

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Abstract

We use structural estimates of time preferences to customize incentives for a sample of polio vaccinators during a series of door-to-door immunization drives in Pakistan. Our investigation proceeds in three stages. First, we measure time preferences using intertemporal allocations of vaccinations. Second, we derive the mapping between these structural estimates and individually optimal incentives given a specific policy objective. Third, we experimentally evaluate the effect of matching contract terms to individual discounting patterns in a subsequent experiment with the same vaccinators. This exercise provides a test of the specific point predictions given by structural estimates of time preference. We document present bias among vaccinators and find that tailored contracts achieve the intended policy objective of smoothing intertemporal allocations of effort. The benefits of customized incentives in terms of achieving the policy objective are largest for vaccinators allocating when present bias is relevant to the decision.