Can Money Motivate Students? Hawaiʻi Econ Professor Hopes to Find Out

Jan 10, 2019


Can money motivate students to get better grades? That’s the question at the center of a research project being launched by an economics professor at UH Mānoa. HPR Reporter Kuʻuwehi Hiraishi has this story.

Economics Professor Lester Lusher is heavily recruiting test subjects – full-time undergraduate students at UH Mānoa willing to put money where their grades are.

“The simple pitch is that students have the opportunity to wager and win real cash on their academic outcomes,” says Lusher.

The program is called College Better. The way it works is students commit to raising their cumulative GPA at the end of the semester by wagering $20. This is all handled online.

“These $20 wagers are collected into a figurative pot and then at the end of the semester the university verifies using transcripts who does and who does not succeed,” says Lusher, “And those students who don’t succeed do not recover their wager, they’re $20 out. And those who do succeed will recover their wager, and split the losing wagers proportionally.”

The main question is whether this monetary incentive can help students commit to improving academic outcomes. Lusher first launched the program in 2015 at UC Davis, where he earned his PhD. There he found that participation significantly boosted student performance.

“Students were winning a lot of money too,” says Lusher, “So some of our early pools were $10 wagers, then we went to $20 wagers. Then we did some pools where you can wage any amount you want from $20 and $100 wagers and if you wagered more you’d get a bigger cut of the pot after each semester.”

It should be noted that the size of a student’s winnings is also dependent on the number of students, losing.

“I think perhaps the most interesting part of my research at Davis, was that I found that students were very overconfident,” says Lusher, “So what happened was a lot of students sign up and they sort of self-state, 'Yeah, I’m definitely raising my GPA,' 'I could raise it whenever I want but I just don’t try hard enough.'”

Lusher says the success rate for students in the program was around 60 percent.

“So that means that students are almost doubling how much money they’re putting in. It’s roughly an 80% increase,” says Lusher, “So if you put in $20, you could expect to get $36 back. If it behaves like Davis. But that was still better than the control group.”

The control group were students who did not participate in the program at all. They raised their GPA at a roughly 50 percent rate.

“So it still suggest that participating in the program does boost your outcome, but that you can still win a lot of money because there are a lot of just overconfident student,” says Lusher.

Lusher anticipates similar results here at UH Mānoa, but that depends on whether he can pique student interest.

For more information or to sign up for the program, visit