Focus Question: How people respond to positive and negative economic incentives?

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Positive Incentives

Negative Incentives


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.A negative incentive would be financial punishment for making specific choices or taking specific actions, such as buying certain items at a store or eating at a specific restaurant.A business or government agency may offer incentives for speeding or littering.

positive incentives


negative incentives


Harvard Business Review article that deals with instances in which incentives backfire

In recent years, there is a movement in the US to move away from the use of negative incentives in the justice system.The argument is that negative incentives, such as littering laws and fees for broken taillights, reinforce poverty systems because they disproportionately impact low income people.

For an article about scaled fees as a way to continue implementing negative economic incentives, look at

For an excellent overview of the way that fees and fines create a series of cascading negative economic incentives and their impact on poor communities, especially those of color, check out How Fines and Fees Criminalize Poverty: Explained, by The Appeal.

Click here for an article discussing how governments use economic incentives to increase inequality

For an article by the Human Rights Watch, an international organization that focuses on human rights abuses around the globe, check out: US Justice System Fuels Poverty Cycle.

For an article about changing US policy from negative incentives to positive incentives, check out: The Other Side Of Broken Windows by The New Yorker.

For an article about alternative methods to negative incentives with regard to littering, check out: Littering and Following the Crowd, by The Atlantic.

The source mentioned at the bottom,, is an excellent resource with clear examples and explanations. It has a usefulworksheetabout economic incentives, and other ideas for a constructive classroom lesson as well.


Economic Incentives in Our Communityis another lesson plan to help illustrate the concept.

Click here for a study detailing the differences in how men and women respond to incentives

Lesson planoutline from that allows students to think about examples when their decisions were swayed based off of an incentive.

Click here for a lesson plan on economic incentives

Click here for a lesson plan on Incentive Theory


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Government agencies use which of the following to prevent people from breaking laws.

The.Providing incentives to employees

In.Incentives resulting in negative results

The.Gains in economic terms

3.2.Economy Returns

Answer: B

Economic Incentives in our Community.The URL for this lesson is