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

摘要

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