American Economic Journal: Applied Economics
no. 1, January 2022
We test the predictions of the rational addiction model, reconceptualized as rational habit formation, in the context of handwashing in rural India. To track handwashing, we design soap dispensers with timed sensors. We test for rational habit formation by informing some households about a future change in the returns to daily handwashing. Monitoring and incentives raise handwashing contemporaneously, and effects persist well after they end. In addition, people are rational about this habit formation: when they anticipate future monitoring, they increase their current handwashing. Average child weight and height increase for all study arms given soap dispensers.
Hussam, Reshmaan, Atonu Rabbani, Giovanni Reggiani, and Natalia Rigol.
"Rational Habit Formation: Experimental Evidence from Handwashing in India."
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