Paying people to smoke

Posted by Marc Hodak on March 28, 2007 under Unintended consequences | Comments are off for this article

In this day, even cigarette companies wouldn’t actually provide financial incentives to get people to start smoking. No, only people bent on helping smokers quit could come up with incentives like that. From today’s WSJ, we have the example of Rockford Acromatic Products:

The Illinois auto-parts maker used to offer $250 to employees who would stay smoke-free for several months. But some workers took up smoking just so they could quit and qualify for the reward. The company stopped offering the incentive.

“It was not our intention to encourage people to start smoking. It was aimed at people who already had a bad habit.”

That’s the way it is with incentives. People getting into the incentives game tend to have bad aim, like beginners in any sport. Even experienced incentive experts can’t always account for all of the secondary effects of their schemes.

For me, a key element in this note was that the company “stopped offering the incentive.” It’s not surprising that they stopped, of course, once they saw the perverse effect it was having. It was the speed with which they recognized this effect, and how quickly and completely they were able to change course. A more bureaucratic environment may have taken much longer to recognize the problem or deal with it. A more politicized environment, where the program was the pet project of a powerful manager, may have attempted to bury the potentially embarrassing glitch in the program, or even taken the higher numbers of people accepting the reward as proof of their program’s efficacy. I’ll leave it to the imagination of the reader to figure what a politicized bureaucracy would have done with such a program.