Targeting Using Differential Incentives: Evidence from a Field Experiment

In a field experiment in Nepal, we varied the amount of financial incentives provided to health outreach workers by the ethnicity of the client they recruited for a free sugar level assessment. We find that our differential incentive in the ratio of 2.5∶1, geared toward encouraging a disadvantaged referral, raises the chances of such a referral by 11.6 percentage points (95% confidence interval, 1.1–22.1). This effect translates to an incentive elasticity of referral of 0.2. There is no evidence that the outreach workers refer less sick individuals to benefit from higher financial incentives; nor do they target fewer overall referrals.