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Cash incentives for COVID-19 vaccines can backfire if too small, UCSD finds

Photo of COVID-19 vaccine cards taken on May 9, 2021.
Alexander Nguyen
Photo of COVID-19 vaccine cards taken on May 9, 2021.

While offering high monetary compensation as incentive can greatly increase the rates of people receiving COVID-19 vaccines, smaller amounts actually deter some who would otherwise be willing to get the shot, according to a UC San Diego-led study released Monday.

The study, to be published in the next edition of the journal Management Science, found that compensations need to be large — at least $100 - - to reduce vaccine hesitancy. Conversely, the study found that low monetary compensations of $10 or $20 can backfire and reduce vaccine intentions, compared to no compensation at all.

"The backfire effect of small compensations was especially prevalent among those who are skeptical of vaccines," said study co-author Marta Serra- Garcia, associate professor of economics and strategy at UCSD's Rady School of Management. "It could be seen as a price tag by people and a low price may indicate the item is not of good quality."


The UC San Diego study found a $100 compensation offer increases vaccine intentions by 4.5%, whereas a $20 compensation decreases intentions by 5%, relative to no compensation at all. The largest incentive of $500 increases support by about 15% to 20%.

According to the study, participants politically aligned with former President Donald Trump reported to be more vaccine hesitant, citing a lack of trust in the newly created inoculation.

Incentives to get vaccine-hesitant people inoculated vary from amounts such as $25, going up to $750 in some companies, or much larger lottery prizes offered by local governments of some cities and states

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"If prevention of infection and outbreaks is a major goal, this investment can pay for itself," Serra-Garcia said. "For some employers, like nursing homes or hospitals, the increase in vaccination rates may be crucial to save many lives. Moreover, for many other businesses, such as factories, it may be fundamental to avoid larger outbreaks, in order to stay economically healthy."


The study also measured the efficacy of "nudges," such as pre- scheduled vaccine appointments. These increase vaccine intentions by five to six percentage points, the researchers found.

"In areas where support for the vaccine is low, due to a lack of trust, prescheduled appointments and compensations of at least $100 could be effective in increasing vaccine take-up," Serra-Garcia said.

The study took place from December 2020 to February 2021 and surveyed 1,544 ethnically diverse participants across the country. There were two rounds of data collection among the respondents.

As a caveat, the study was conducted at a time when a large majority of people did not yet have access to COVID-19 the vaccines, so the surveys could not measure actual decisions. However, the researchers say, the results could have important implications for businesses and governments.

"This pandemic will likely not be the last one within the next decades," Serra-Garcia said. "Additionally, the multiple COVID-19 variants continue underscore the importance to understanding how to motivate people to take up preventative measures, such as vaccination."

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