Working Paper: NBER ID: w22316
Authors: Greer K. Gosnell; John A. List; Robert Metcalfe
Abstract: Understanding motivations in the workplace remains of utmost import as economies around the world rely on increases in labor productivity to foster sustainable economic growth. This study makes use of a unique opportunity to “look under the hood” of an organization that critically relies on worker effort and performance. By partnering with Virgin Atlantic Airways on a field experiment that includes over 40,000 unique flights covering an eight-month period, we explore how information and incentives affect captains’ performance. Making use of more than 110,000 captain-level observations, we find that our set of treatments—which include performance information, personal targets, and prosocial incentives—induces captains to improve efficiency in all three key flight areas: pre-flight, in-flight, and post-flight. We estimate that our treatments saved between 266,000-704,000 kg of fuel for the airline over the eight-month experimental period. These savings led to between 838,000-2.22 million kg of CO2 abated at a marginal abatement cost of negative $250 per ton of CO2 (i.e. a $250 savings per ton abated) over the eight-month experimental period. Methodologically, our approach highlights the potential usefulness of moving beyond an experimental design that focuses on short-run substitution effects, and it also suggests a new way to combat firm-level externalities: target workers rather than the firm as a whole.
Keywords: externalities; incentives; fuel efficiency; airline industry; environmental sustainability
JEL Codes: D01; J3; Q5; R4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Treatments (C22) | Marginal abatement cost (MAC) (D61) |
| Efficiency improvements (D61) | Fuel savings (Q41) |
| Fuel savings (Q41) | CO2 savings (Q54) |
| Performance information (Y10) | Efficient flight behavior (L93) |
| Personal targets (L21) | Efficient flight behavior (L93) |
| Prosocial incentives (D64) | Efficient flight behavior (L93) |
| Information treatment (L96) | Efficient taxiing effort (L93) |
| Personal targets (L21) | Effort across all dimensions (D29) |
| Prosocial incentives (D64) | Effort across all dimensions (D29) |