The Big Carrot: High-Stakes Incentives Revisited

Pablo Brañas-Garza, Universidad de Granada
Teresa García-Muñoz, Universidad de Granada
Shoshana Neuman, Bar-Ilan University

Abstract. Using an international dataset of about 35,000 subjects, this paper provides an empirical example of high-stakes incentives in relation to religious practice. First, we show that incentives (based on absolute belief) play a salient role in religious performance. Second, we find that, when both positive (heaven) and negative (hell) incentives are available, the former are more effective than the latter. Specifically, it is shown that beliefs in heaven are much more relevant than beliefs in hell when estimating the production of religious commodities (church-attendance and prayer equations).

JEL Codes: C91, D64, Z13

Keywords: carrot/stick, high-stakes incentives, rewards, punishment, Economics of Religion, loss aversion, ISSP