Justification for Cash Survey Participation Incentive 04 21 2016

Justification for Survey Participation Cash Incentive

The Food and Nutrition Service (FNS) is requesting the use cash incentives to increase survey response rates in the Evaluation of the Food Insecurity Nutrition Incentive Grant Program. While the use of cash incentives is currently not the preferred method by OMB for increasing response rates, FNS believes that for this study population of low-income households cash incentives are the most appropriate way to ensure that the response rate is high enough to provide reliable and generalizable results.

Cash is better than checks as a medium for incentives for low-income populations because many low-income households are unbanked. For instance, over a quarter of households with incomes of $15,000 or less are unbanked¹. If these households are to monetize their checks, they often must use check cashing services that often require customers to pay substantial service charges in order to cash a check²³. Cash incentives are also preferable to pre-paid gift cards as cash has shown to provide a higher response rate than prepaid vouchers⁴ or gift cards⁵.

Achieving high recruitment and retention rates is critical to data quality. Providing an extrinsic incentive can improve these rates, especially in populations defined as being in poverty⁶⁷; and a monetary incentive even more so⁸. In addition, incentives disproportionately encourage those less interested in the research to participate, thus reducing non-response bias⁹. Finally, the research suggests that individuals receiving an incentive are more co-operative in providing contact information that will allow tracking their whereabouts for successive rounds of a survey¹⁰. Given that research suggests that cash incentives are the best medium for increasing survey response rates among low-income populations, FNS requests approval to use cash incentives to maximize response rates and ensure that the survey provides reliable and generalizable results.

1 Federal Deposit Insurance Corporation (2014). 2013 FDIC National Survey of Unbanked and Underbanked Households. Available at: https://www.economicinclusion.gov/surveys/2013household/documents/2013_FDIC_Unbanked_HH_Survey_Report.pdf.

2 Roger Swagler R, John Burton J and Joan Koonce Lewis J (1995). The Alternative Financial Sector: An Overview.

Advancing the Consumer Interest . Vol. 7, No. 2 (Fall 1995), pp. 7-12.

3 Fox J A, Woodall P (2006). Cashed Out: Consumers Pay Steep Premium to “Bank” at Check Cashing Outlets. Available at: http://consumerfed.org/pdfs/CFA_2006_Check_Cashing_Study111506.pdf.

4 Van Veen F, Göritz A, Sattler S (2004). Response effects of prenotification, prepaid cash, prepaid vouchers, and postpaid vouchers: an experimental comparison. Social Science Computer Review. Available at: http://ssc.sagepub.com/content/early/2015/05/05/0894439315585074.abstract.

5 Birnholtz J P, Horn D B, Finholt T A, Bae S J (2006). The effects of cash, electronic, and paper gift certificates as respondent incentives for a web-based survey of technologically sophisticated respondents. Social Science Computer Review. Available at: http://ssc.sagepub.com/content/22/3/355.short.

6 Singer E. (2002). The use of incentives to reduce non response in households surveys in: Groves R, Dillman D, Eltinge J, Little R (eds) Survey Non Response. New York: Wiley, pp 163-177.

7 James T. (1996). Results of wave 1 incentive experiment in the 1996 survey of income and program participation. Proceedings of the Survey Research Section, American Statistical Association, 834-839.

8 Groves R, Fowler F, Couper M, Lepkowski J, Singer E. (2009) in: Survey methodology. John Wiley & Sons, pp 205-206.

9 Groves, R., Singer, E., Corning, A. (2000). Leverage-saliency theory of survey participation: description and an illustration. Public Opinion Quarterly. 64(3): 299-308.

10 Shettle C, Mooney G. (1999). Monetary incentives in US Government surveys. Journal of Official Statistics, 15(2): 231-250.