Abstract
The present thesis contributes to the inequality, incentives and motivation literature by linking all three areas using behavioural and experimental economic methods and insights. It does this in three empirical studies that used economic experiments to gather data on the direct causal impacts of different types of incentives on effort and motivations using a realeffort task. The first study of this thesis investigated whether preferences for monetary and non-monetary incentives could be influenced by an individual’s income background. In other words, whether those who grew up with less income would have a higher relative value of, and preference for, money than those who grew up with more income. Overall, the poor did not prefer money over non-monetary incentives, although the non-poor did increase effort more for competitive incentives compared to other incentive types tested. The second study explored whether individuals from different income backgrounds would react differently to changes in the cost of effort: long- versus short-task instructions signalling cost of effort. The findings indicated that task settings mattered where lower-income participants worked significantly harder when the cost of effort was lower (short instructions) while higher income participants worked significantly harder when the cost of effort was higher (long instructions). Both income groups did require incentives, though. Finally, the third study compared the different measures of intrinsically motivated hard work to gain better insight into what drives individuals from different income backgrounds to work hard. Of interest in this third study was testing whether the self-determination theory of intrinsic motivation could be practically applied and yield equivalent outcomes as the standard economic measure of hard work and whether motivations differed by income groups. This study found inconclusive results. Overall, the main conclusions of this thesis showed that income backgrounds did impact the effectiveness of incentives and cost of effort.
Ph.D. (Economics)