Monday, March 1, 2010

Can finding the right motivation help prevent procrastination?

A dear friend of mine found this article from The Economist, about which she thought I should rant. It's titled "New-year irresolution" and it's about why people fail at New Year's resolutions, except that the hope is to explain such failures through an economic model. What's sort of funny is that the article comes up with some solutions to overcome procrastination...and my friend sent me this article about two months ago. Hmmm...

So the general premise is that, historically, it has been assumed that people are "time-consistent," meaning that if asked today when they are going to do something, if a person says "Oh, next Thursday," and you ask them this tomorrow and the next day and the next day, the same Thursday is always the answer. This doesn't work because people are time-inconsistent.

This time-inconsistency is also known as being "present-biased," meaning that people will put off doing unpleasant things, even if the cost today is small. This is why it is so hard for many people to save money, or give up soda, or do anything else that's not all that much fun. Today, you can't buy something, if you hope to save money for something later on. Changing habits, even if you know the change will be worth it, is both really hard to do, and usually slightly painful.

I exercise about four times a week. I'm actually pretty consistent about that (I know because I write it down). But I guarantee you that for at least three of those four times a week, I can think of about 10 other things I'd rather be doing, or that I also need to do. And it's not even the exercising bit that's the problem for me. I have to drive to the gym, and park in their crappy parking lot, and check in, and lug all of my stuff to the locker room, and...I could go on an on. But, I know I'll feel better after working out, and that I'll still be able to eat cookies and fit into my pants. I'll probably panic when bikini season hits San about four days, but I also know that if I tried to do one of those crazy diets where I give up carbs and exercise like a madman, I'll turn into a madwoman. So this system will have to be good enough.

Wow...I got a bit off topic. I was just illustrating the draws of procrastination and the virtues (?) of biting the proverbial bullet and just getting on with things. Back in the world of The Economist, the article cites that a few economists looked at the economics of procrastination. Try saying that three times fast!

Here's the economical problem: very few farmers in Africa use fertilizer, even though it's fairly inexpensive, and will increase their crop yield, despite knowing this. The problem comes not actually from the use, but from acquiring the fertilizer. It would make the most sense for these farmers to buy the fertilizer right after the harvest, when they actually have cash in their hands, rather than around planting time, when they're running low on money. However, the farmers usually have to do something, like walk a few miles to the nearest store, or buy a bus ticket. These things aren't big deals, but they're not that much fun, either, so the farmer thinks they'll do it later. And you know what happens.

So a scheme was developed! And, as in all quality economic schemes, there was a control group. The control group of farmers were just left alone to go about their business, while another group of farmers was given a deal in which, if they bought fertilizer right after the harvest, they would get it delivered for free. A third group of farmers would get the fertilizer delivered for free, but only if they bought it at planing time, and a fourth group of farmers were offered a 50% subsidy on the fertilizer.

The conclusion of these scenarios was that both the free delivery right after harvest and the 50% subsidy increased fertilizer usage by 11%, while the free delivery right before planing time had a statistically insignificant effect on fertilizer usage.

Personally, I'm a big fan of free delivery, although half-off is good motivation, too. A bigger underlying problem, though, is that people have to be motivated to make choices that are ultimately good for them. This year, my company started offering a Health Savings Account. After researching it, my husband and I decided that this was in our best interest. Why? Because it's a low premium and a high deductible. That doesn't sound too good, until you consider that my annual is free, as is his yearly physical. And the company set up an account with $1,100 for us to spend on other health care expenses. So yes, our deductible is $1,400, but we only have to pay that $300 before the co-pay rates kick in. Here's why this was so attractive to us: we're healthy. We don't smoke, we exercise, we don't have any on-going medical problems (like high blood pressure, or diabetes). We were tired of paying our health insurance premiums to subsidize people who were making bad decisions (and when we were on Captain America's health insurance, we were subsidising families. If we wanted to pay for sick kids, we would have some of our own!).

Some people respond well to carrots. In this case, it seems that finding the right motivation would work well. Some people respond well to sticks. Again, the right motivation would be helpful. And if you can't figure out what will work for you, or if you're stuck on finding the solution, you could just ask me, and I'll TELL you what to do. You want to lose weight? STOP eating McDonald's! You want to save money? STOP buying lattes! You want your kids to become productive, intelligent members of society, of whom you can be proud? TALK to them, ENCOURAGE them, don't buy them EVERYTHING THEY WANT, and for heaven's sake, TEACH by example! But STOP with the procrastination-enabling excuses! BE the Nike motto, and JUST DO IT!

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