By Robert Metcalfe,Greer Gosnell & John List
WE partnered with Virgin Atlantic Airways on a field experiment to understand how employees—in this case, airline captains—influence fuel efficiency, and how low-cost company interventions can affect their behavior.
We randomly allocated 335 captains to three treatment groups and a control group. All the captains were told that their flight and fuel behavior would be monitored for the next eight months. The second group received this information, as well as a personalized monthly performance target that was 25 percent above their preexperiment baseline. The third group was also offered an incentive for achieving their targets (a donation to their charity of choice).
We analyzed more than 40,000 flights during 2013 and 2014, and compared the behavior of each captain before and after the study began.
- The vast majority of captains, from all groups, engaged in more fuel-efficient decision-making, such as optimizing in-flight procedures and fueling precision. The captains’ performance improved with their awareness that their behavior was being monitored. This is consistent with a social-science phenomenon called the Hawthorne effect: People change their behavior when they know they’re being observed.
- Challenging captains to meet higher performance targets proved to be the most cost-effective intervention. This group improved fueling precision, in-flight efficiency measures and taxiing practices by 9 percent to 20 percent. We attribute this strong effect to challenging the captains’ status quo: They adjusted their habits to meet the higher expectations for a satisfactory job performance.
- The offer of charitable contributions for meeting targets didn’t lead to behavior change. The fuel efficiency improvement in this group was similar to that of the targets group. However, captains in this group reported 6.5 percent higher job satisfaction than those in the control group.
These behavioral interventions cost little but we estimate that Virgin Atlantic saved $5.4 million in fuel over the course of the study.
Robert Metcalfe is a research scholar in economics in the Becker Friedman Institute at the University of Chicago. Greer Gosnell is a researcher of environmental economics in the Grantham Research Institute at the London School of Economics. John List is a professor of economics at the University of Chicago.