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An Economist Tells You How to Lose Weight

So you've made it your New Year's resolution to shed a few pounds in 2011? You might be more successful if you set up a system to penalize yourself, rather than reward yourself, if you fail.

That's one conclusion of a recent study by John Cawley, an economist at Cornell, who researches the relationship between our national weight problem and our money.

In a paper coming out this year in the book Economic Aspects of Obesity, Cawley and his colleague Joshua Price looked at the results of workplace weight-loss incentive programs. The study tracked data from 2,400 employees who enrolled.

The programs were designed in different ways. In one, employees got small monetary rewards at the end of each quarter if they lost weight. In a second, employees had to post bond: They volunteered to put up $9.95 per month of their own money. At the end of the year, they got all their money back if they had lost 5% of their body weight, and they got a $100 bonus if they lost 10% of their body weight. But if they failed to hit the 5% target, they forfeited their money.

So what's the, um, bottom line? First, most people dropped out before the year was up. In the group that was getting cash rewards, 76% didn't complete the program. Of the group that posted their own money, 57% didn't finish. That's a much higher rate of attrition than earlier studies had found.

People did better at hitting their weight-loss targets when they stood to lose their own money than when they were rewarded with someone else's cash. Of the first group, only 5.4% lost 5% of their body weight over a year. In the second, 19.5% achieved that target. (Maybe that's the same reason triathlon training works: I have to pony up an $85 entry fee three months in advance, and I hate to lose it if I'm undertrained and decide not to participate.)

Cawley speculates that some sort of hybrid incentive program, using the carrot (not dipped in ranch dressing) and the stick, might be the best option for keeping people on track. These programs in their current format, he says, do little to overcome what economists call "time-inconsistency preferences." Here's how Cawley explains that concept: "I like the idea of running three miles every day, but when I wake up in the morning, I don't really want to do it today. That's the time-inconsistent nature of it. If you asked me a month ago if I want to run three miles today, I would have said, 'Yeah, sure, I want the future John to run those miles.' Today's John doesn't want to run them."

The trick is finding a way for today's self to motivate the future self to engage in healthy behaviors. That's not easy to do. "For anyone who is obese, there are huge benefits to them reducing their weight," Cawley says. "There are social benefits, labor market benefits, health benefits. But the problem seems so daunting that taking small steps seems hopeless."

So what's your advice, I asked him, for people who want to lose, say, 20 pounds in 2011? "Be aware of this problem of time-inconsistent preferences," he says. "Realize you're going to have this long-term goal, but day-to-day it's going to seem pointless or too difficult to stick to it. And so find some way of putting on the blinders and incentivizing yourself day-to-day to get out and do those little things that in the end add up to long-run success."

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