Thursday, March 06, 2008

Paying for High Grades and Behavioral Economics

I have just finished reading a very entertaining and provocative book by Dan Ariely, called Predictably Irrational. It provides an overview of behavioral economics, an approach to human behavior within the economics discipline that rejects the neoclassical view that all (or even most) human behavior is rational. Ariely recounts wonderful experiments that demonstrate the degree to which human behavior is irrational but predictably so (hence the title). By knowing our own rational shortcomings, he argues, we can design our world to produce better outcomes.

I highly recommend the book, in part because the experiments are often amusing and sometimes shocking. In one experiment, for example, college students are asked a series of questions about their sexual proclivities under two distinct conditions: in one, the students are simply answering the questions in a calm state; in the other -- and I am not making this up -- the students are, by instruction, masturbating to pornography, having reached a point of high arousal. As it turns out, the unaroused subjects under-predict their inclination to engage in various sexual practices by comparison to their answers in the aroused state (including their likelihood of having unprotected intercourse, of having sex with someone they hate, and of spiking a date's drink to make her more willing to consent to sex -- the subjects were all male). Most of the experiments are far less controversial.

My interest in this post, in addition to encouraging people to read the book, is to apply some of the wisdom of behavioral economics to a limited new program in the New York City public schools in which students are paid money for high grades. The front page of Wednesday's New York Times has a story describing the new program. The story's tone is at least mildly favorable, suggesting that paying people money for performing well has made it "cool" for children to try to learn at school. Nothing in the article indicates the worry that Ariely (or that social psychology research in which I participated as an undergraduate in the late 1980's) exposes about such practices -- paying people to do things reduces their intrinsic desire to do them. When children in a classroom, for example, are told that they will receive a reward for drawing pictures, their desire to draw pictures during unsupervised time (when there is no expected reward) diminishes significantly relative to the desire of children who are asked to draw but have not been offered a reward (even if they are given a surprise reward after completing their drawings). It appears that when we watch ourselves behave, we draw inferences about our likes and dislikes in much the same way as we would about other people whom we might observe. If we see ourselves drawing pictures (or blogging, for that matter) without receiving a monetary reward, then we infer that we must enjoy drawing pictures (or blogging). If, on the other hand, we see ourselves drawing pictures in response to a financial incentive, then we infer, first, that we are only drawing because we want the money and second (and far more worrisome), that we don't really enjoy drawing pictures and will only do it in the presence of an extrinsic reward.

Ariely describes the phenomenon of transferring an activity from the social realm, in which people enjoy doing things for themselves and one another and do not keep rigid track of reciprocity, to the financial realm, in which one person gives another person only enough to receive a reciprocal benefit. Imagine, he says, that your mother-in-law prepares a delicious meal, and you want to tell her just how much you liked it. If you were to offer her $300, she would likely be outraged and insulted (perhaps in much the same way as a girlfriend or boyfriend might be insulted if you offered him or her a large sum of money after sex). Introducing crass exchange into the social realm undermines the norms that govern that realm.

What does all of this have to do with paying children for high grades? At some point between kindergarten and twelfth grade, schools manage to take the natural human instinct for learning and convert it into a reluctance bordering on hostility to learning that must be overcome by promises and threats. Indeed, this appears to be precisely the problem that is now being addressed with increasingly concrete forms of compensation, such as dollars and cents for academic performance. The manifest danger is that students will become even less inclined than they already are to study in the absence of an external reward. This would be unfortunate not only because the financial incentives may ultimately run out and spell the end of many people's education, but also because the potential fun of learning skills and information -- the joy that could last a lifetime for children once they are grown and no longer formally receiving an education -- is unwittingly and tragically destroyed.

One response, of course, could be that at least in some schools, children have already lost the internal love of learning that they once had, and payment for performance is the only way to get them to do what they really must do to survive in an increasingly complicated world: learn. If students really do hate studying, in other words, then we might as well do something to motivate them -- even if only for so long as the incentive is in place -- to do their work. If, for example, you want people to clean a cold laboratory that smells disgusting, it may be necessary to pay them (or to threaten to take something away from them). It is likely to be impossible to make them love and crave such work. I am not, however, prepared to accept without better evidence the premise that children's excitement about learning simply cannot be ignited and must therefore be replaced with compensation. I am dubious because the payment solution is really only an exaggerated version of the likely source of the problem -- the grading method that has been undermining intrinsic motivation in schoolchildren all along. Rather than give students money for receiving grades, themselves extrinisic motivators (albeit ones that rely on people's innate love of approval rather than the desire to acquire consumer products), why not pay closer attention to kindergarten children and the excitement and wonder that characterizes their first encounters with the world of knowledge? We are more likely to find the secrets hidden there than inside the folds of a wallet.

Posted by Sherry Colb


Matthew C. Temkin said...

Also, for teachers of poor students, there will be an (increased) incentive to give high grades where they might not be warranted, because then the student will earn badly needed money.

The resulting grade inflation would dilute the value of the grades themselves, and could prevent those students who would ordinarily work hard to get the good grades from bothering to do so.

Tam said...

I, too, am unwilling to accept the response that some would give for your critique of the money-for-grades program as exacerbating the demotivation of learning, namely, that children have lost the desire and love of learning.

I'm not familiar with the literature on this topic, but speaking from experience a few things strike me as peculiar about our cultural attitudes towards knowledge.

First, kids and adults alike who love knowledge and the process of learning are for some reason ostracized by our culture.

Second, people wrongly perceive that not only is it uncool to love learning for its own sake, but that it will hurt you livelihood, too. Knowledge that cannot be readily translated into dollars is deemed worthless in America. The general attitude is a rhetorical "so what?" rather than, "Hm. What more can we deduce from that?" This manifests itself in parents urging their kids to take practical classes (e.g., Spanish instead of French, b/c it has wider applicability in the US) early on, and to study a "marketable" major in college. This kind of attitude is probably a big reason why the US trails other developed countries in subjects like math which require more abstract thinking for which there is often times no practical application (nor is one sought by those who engage in the endeavor). This is probably the attitude of most parents, which makes it hard on the schools.

Third, because schools (to a large extent, accurately) perceive that most kids do not have a love of learning, they seek to offer extrinsic rewards, which exacerbates the problem because it derails a few more kids, who might have otherwise been salvagable. This is sort of like a self-fulfilling prophecy.

It seems to me like the source of this problem so permeates our culture that it is difficult, if not impossible, to solve without a cultural paradigm shift so that learning is valued across the board, not just by an elite cognoscenti. As a practical matter, it seems to me like the above are very strong reasons for sending one's child, if you can afford it, to an elite private school early on, where they will be among other children of like-minded parents, and also taught by like-minded teachers and administrators. I don't think there's ultimately anything inconsistent between that and being a liberal egalitarian, but as one, I wish it didn't have to be that way.

Finally, I note that so pervasive is this negative attitude towards learning that even many well-to-do professionals (doctors and lawyers alike) share that view, and so, private school is a necessary but not sufficient condition for ensuring that one's kid is going to be among kids of like-minded parents.

That's a fine solution for those who can afford it, but on a societal level, fixing this problem will require changing attitudes.

Caleb said...

On a totally tangential note , what does the research say about the likelihood of enjoying your job? We're all told to seek out careers we enjoy, but if being paid for it will slowly destroy our love of what we do, perhaps we should all pick something we already hate?

egarber said...

Speaking anecdotally as a parent and husband of a public school teacher (who has a lot to say about this kind of stuff :) ), we've found that one key is to tether the learning experience to something the boys are already inclined to enjoy.

So for our 8 and 5 year-old boys, that means buying the whole series of Transformers books**. [Transformers are those robot guys]. Obviously, they won't be able to cherry-pick their educational content throughout life, but they'll at least start out (we hope) with self-generated curiosity and desire. Reading for leisure is one of our family values, I guess you could say.

**I tried it with "No Litmus Test" and it flopped :)

As a rough equivalent of the "pay plan", we have a "marble incentive" program, whereby the boys earn marbles for doing chores, behaving well, etc. When their jars fill up, they essentially get 10 bucks or so to buy a toy. So far though, we don't include school work in the program, maybe unconsciously because of the same concerns you allude to.

Good post Prof.

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