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‘Put Your Money Where Your Butt Is’

That’s the clever title of the latest paper from Dean Karlan (one of the founders of, who was featured in this New York Times Magazine article yesterday along with my colleague John List) and co-authors Xavier Giné and Jonathan Zinman.

The researchers had surveyors approach people on the streets of the Philippines and offer them the opportunity to open a bank account that paid zero interest. The kicker: all the money deposited would be forfeited if, six months after opening the account, the account holder’s urine test showed evidence of smoking.

It doesn’t sound like much of an offer: zero interest, a good chance you’ll lose any money you deposit, and you have to consent to the embarrassment of a urine test. Still, the power an experimenter yields over subjects never ceases to amaze me — more than 1 in 10 of the people approached actually signed up for the account!

It worked surprisingly well, too. The treatment-on-the-treated estimate suggests that about 30 percent of those who opened an account quit smoking because of the account. That’s a higher success rate than is generally seen among those who try to quit smoking using nicotine patches, etc.

Also, who knew that people in the Philippines wanted to stop smoking? I thought kicking the habit was an exclusively American obsession.