$100 for a jab? Why vaccine incentives favor lotteries over cold, hard cash

Vaccine appointment slots were booked out, and injection centers were filled to capacity with long lines of people waiting outside. Hong Kong started its campaign by distributing COVID-19 vaccine doses from Chinese manufacturer Sinovac, but mRNA shots soon followed from Germany’s BioNTech. Observers, like the Economist Intelligence Unit, expected that Hong Kong could be one of the first places in the world to achieve widespread vaccine coverage given the city’s plentiful vaccine supply.

“Psychologically speaking, I feel safer,” Alan Yuen, a 60-year-old recent Hong Kong retiree, told Fortune in February, after staying up until midnight days earlier to be one of the first city residents to sign up for a jab.

But now, Hong Kong’s vaccine drive has all but petered out. The daily vaccination rate has plummeted to roughly 25,000 injections per day from a high of over 46,000 in early April.

As of Friday, 17.3% of Hong Kong’s 7.5 million citizens have gotten at least one dose of a vaccine, even though the city expanded its free vaccine program to include every resident over the age of 16 last month. Uptake is so slow that nearly 1 million doses of BioNTech’s vaccine, one of the world’s most proven and effective COVID-19 jabs, are set to expire in August and may have to be thrown out if they go unused.

Vaccine hesitancy in Hong Kong is the result of many factors: the public’s deep distrust of the city’s pro-Beijing government, the city’s relative containment of the virus, and local media reports that have sensationalized vaccine side effects.

Due to the low vaccination rate, some lawmakers and members of the Hong Kong media are suggesting that the government pay residents to take the vaccine. “Our government officials probably need to be more creative,” Hong Kong columnist Ben Kwok wrote, calling for the government to offer cash rewards or other incentives to get people vaccinated.

Carrie Lam, Hong Kong’s chief executive, says that for now, such incentives aren’t on offer.

“To offer cash or something physical to encourage vaccination shouldn’t be done by the government and may even have the opposite effect,” Lam said at a press conference this week.

Research suggests Lam’s concern about cash rewards backfiring is valid. At the same time, there is increasing evidence and real-world examples that money can be an effective motivator—but only when it’s gigantic sums.

The research

In May, the UCLA COVID-19 Health and Politics Project published a study on how people responded to various vaccine incentives.

The study asked over 7,000 people if they would be more or less likely to get a vaccine if offered a cash reward. The study found that 28% of respondents would be more likely to get a vaccine if they were offered $25, that share rose to 34% when the payout increased to $100.

But the offer had a downside too. In both cases, 15% of respondents said the cash offer made them less willing to get the shot.

“Cash incentives can backfire,” says Semra Ozdemir Van Dyk, professor at the Duke-NUS Medical School in Singapore and an expert in medical decision making. “For some people, the cash indicates that there must be some kind of risk that I’m taking. These people can become even more suspicious about the government’s motivations and why they are being offered this vaccine.”

Cash may help boost vaccine uptake in the short term, Ozdemir says, but there needs to be public buy-in beyond the immediate payout so people show up for second dose appointments or booster shots later on. She says that research from Duke University behavioral scientist Dan Ariely suggests that monetary incentives, especially in relatively small amounts, are not as big a motivator as we might think.

“People sometimes do things for altruistic reasons,” Ozdemir says. “Paying them just takes away that altruism, and can make them more suspicious.”

The gamble

Giant jackpots, however, are a different story.

On Thursday, state officials in California announced a new $116.5 million lottery program to help boost falling vaccination rates in the state.

The officials said every resident who signs up for a vaccine, along with those who have already gotten jabbed, will be entered into a state lottery. Ten winners will receive a $1.5 million cash prize, while millions more will be eligible for prizes ranging from $50 gift cards to $50,000 cash payouts.

California’s policy follows similar programs being rolled out in other U.S. states.

In Ohio, state officials claim that a lottery announced in mid-May boosted vaccination sign-ups by 28%. Oregon, New York, Colorado, and Maryland have also launched their own lotteries.

Ozdemir says that there is a reason behind the success, and that lotteries should be considered a viable policy option for places like Hong Kong that are dealing with low vaccination rates.

“Lotteries are a completely different psychology than small rewards,” she says. The $10 or $20 that government could actually afford to pay per vaccine “does not excite people versus the idea of winning $1 million,” she says. “Even the prospect of dreaming about it makes them excited.”

People may still question the motivation behind a government lottery, but such a tactic has a better chance of persuading skeptics than smaller cash rewards.

“People are just always fascinated by lotteries and big cash,” she says. The public may be especially enamored with the prospect of a jackpot now since pandemic lockdowns and travel restrictions canceled or postponed the major life events that people usually look forward to.

“With our mental health during COVID, it really helps to be thinking about something better,” she says.

Hong Kong, it turns out, will get a vaccine lottery. A Hong Kong property developer said Friday that it will conduct a “lucky draw” for all fully-vaccinated Hong Kong residents. But the payout isn’t money, it’s an apartment: a 449-square-foot one-bedroom worth $1.4 million, a jackpot in its own right in the one of the world’s most expensive real estate markets.