Cookies?
Library Header Image
LSE Research Online LSE Library Services

A new approach to an age-old problem: solving externalities by incenting workers directly

Gosnell, Greer, Metcalfe, Robert and List, John A (2016) A new approach to an age-old problem: solving externalities by incenting workers directly. NBER Working Paper Series (22316). National Bureau of Economic Research, Cambridge, Massachusetts.

[img]
Preview
Text - Published Version
Download (1MB) | Preview

Abstract

Understanding motivations in the workplace remains of utmost import as economies around the world rely on increases in labor productivity to foster sustainable economic growth. This study makes use of a unique opportunity to “look under the hood” of an organization that critically relies on worker effort and performance. By partnering with Virgin Atlantic Airways on a field experiment that includes over 40,000 unique flights covering an eight-month period, we explore how information and incentives affect captains’ performance. Making use of more than 110,000 captain-level observations, we find that our set of treatments—which include performance information, personal targets, and prosocial incentives—induces captains to improve efficiency in all three key flight areas: pre-flight, in-flight, and post-flight. We estimate that our treatments saved between 266,000-704,000 kg of fuel for the airline over the eight-month experimental period. These savings led to between 838,000-2.22 million kg of CO2 abated at a marginal abatement cost of negative $250 per ton of CO2 (i.e. a $250 savings per ton abated) over the eight-month experimental period. Methodologically, our approach highlights the potential usefulness of moving beyond an experimental design that focuses on short-run substitution effects, and it also suggests a new way to combat firm-level externalities: target workers rather than the firm as a whole.

Item Type: Monograph (Working Paper)
Official URL: http://www.nber.org/
Additional Information: © 2016 The Authors
Divisions: Grantham Research Institute
Subjects: H Social Sciences > HD Industries. Land use. Labor
Sets: Research centres and groups > Grantham Research Institute on Climate Change and the Environment
Date Deposited: 27 Sep 2017 13:54
Last Modified: 29 Aug 2019 23:27
URI: http://eprints.lse.ac.uk/id/eprint/84331

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year

View more statistics