Friday, May 29, 2009

A "Losing" Bet: Can Wagering on Your Own Diet Help You Succeed?

Can wagering on one's own weight loss goals lead to greater dieting success? (Well, it worked for me once. But more on that later.)

According to a BBC report, "bet dieting" has spread across the pond from the US to the UK. In the betting schemes, dieters use a web site to pony up a monetary stake at the front end of their diets. The stake is held in an account as the diet progresses, unless the dieter fails to meets his or her goals. In that event, the money is deducted from the dieter's account and given to the charity of the dieter's choice.

Talk about incentive-compatibility constraints! It's like the dieter is both principal and agent in a principal-agent problem. And if the risk of financial loss isn't great enough to keep dieters on track, they can also supply the email addresses of people they want notified should they fall off their dieting path--potentially subjecting them to a mix of shame, ridicule, and (hopefully) encouragement.

According to the BBC story, dieters in the US version of the scheme enjoy a success rate near 85 percent. But one should wonder about the sort of person who would voluntarily enroll in such a scheme. My suspicion is that people who are likely to succeed are exactly the people who would be attracted. Stated another way, I imagine that a random sample of overweight people would be much more likely to fail--even after risking some of their finances.

Besides, it's not like the financial consequences are all that strong. After all, the money goes to a charity the dieter picked, where it will do something that presumably makes the dieter happy.

Hmmm . . . , maybe rotund republicans should pick ACORN as their charity, and plump democrats should pick the National Rifle Association. That could strengthen incentives a lot, I imagine.

Which brings me to my personal story about wagering on my own diet success.

Last fall, faculty and staff at Hope College were invited to make a renewed commitment to health for the Holiday Season through the KWIC Holiday Challenge.

KWIC? KWIC stands for Keeping Weight in Check.

According to the communication sent from our college's wellness program,
Some Americans have been known to gain 5-10 pounds over the holidays (aka "the seasonal seven"). In reality, the average weight gain is actually less than 1 pound. The problem with this 1 pound gain, is that most people do not lose the extra weight within the next calendar year, and it thus contributes to the slow creeping weight gain that leads to obesity.
So how were the KWIC incentives structured? Here's the challenge:

Each interested employee needed to weigh in before Thanksgiving, and then again in January. All participants who either maintained or lost weight were rewarded.

We began with a pot of $500, generously financed by the college. Participants were required to add $10 (their bet) to the pot during the initial weigh-in. Everyone who maintained or lost weight over the break would earn an equal share of the final jackpot.

Therefore, successful participants would get their own money back, and more! The unsuccessful would be out ten bucks, which would filter into the pockets of their slimmer coworkers.

The initial weigh-ins were held in the Exercise Science Lab in the DeVos Fieldhouse on Nov. 24 & 25, and follow-up weigh-ins were Jan. 5-7.

On January 12, we learned the results. The campaign was a tremendous success, as 77 of the 83 who weighed in maintained or lost weight. There was a total of 219 pounds lost campuswide, which averages out to over 2.8 pounds per person. Three people even lost eight pounds.

Wow!

And how did I do? I lost weight: 3.5 pounds, to be precise. And I was paid a sweet $19 in January. BIG wow! A 90 percent return on my initial investment--and in these economic times!!

Now think about our success rate. 77 out of 83 works out to be about a 93 percent success rate. And though Andy Williams reminds us each holiday season that it's the "most wonderful time of the year," it really is the worst time of the year for watching one's waistline.

So how did we do so well? Was it the fortitude of the Dutch descendants I work with? Was it the lure of financial incentives?

Well, knowing many of the folks who participated, and also having looked around the room at both the pre- and post-weigh-ins, I'm pretty sure everybody who opted in knew already they were betting on a winner when they bet on themselves. Otherwise, they would have kept their ten dollars in their pockets--especially since there is nothing random about the outcome. Everyone controlled his or her own result.

Two other interesting thoughts I had during the challenge:
1) Tempting the other "players" with sweet treats, thereby sabotaging their efforts in order to gain a potentially larger payout for me.
2) Selling insurance to the players. Maybe some would have been willing to pay, say, two bucks in November to make sure they got their ten bucks back in January.

Does thinking those thoughts make me a cold-hearted economist?

Shudder. Shudder indeed.

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