Paying not to go to the gym

11th March, 2006

Dear Economist,
My new year’s resolution was to get more exercise, so I joined a gym. I’m embarrassed to say that I’ve hardly been. I have the option to cancel the membership, but perhaps I should keep it as an incentive to get fit?
Janet Taggart, Glasgow

Dear Janet,

Many health clubs offer three types of membership. There is the option for the infrequent visitor – a pass entitling you to, say, 10 visits. Then there is a monthly membership that continues indefinitely until cancelled. This is handy for regulars who may have to move or travel and so want the option of cancelling. There is also annual membership which lapses if not renewed: this is cheaper per month, but less flexible.

Different contracts suit different people, but we almost invariably pick the wrong one. For example, the monthly contract is favoured by people like you, who don’t actually show up to the gym. Worse, those hapless suckers are too lazy even to cancel the contract, meaning that many of them would have been better even had they signed up for a year and never gone.

(This insight comes from an excellent paper titled “Paying not to go to the Gym”, by economists Stefano DellaVigna and Ulrike Malmendier. Bridget Jones features in the bibliography.)

My recommendation is for you to see if you can switch to a pay-per- visit pass. This will work out cheaper unless you experience a startling change of willpower. (If you do you can always get annual membership later.) If you’re looking for financial motivation, why not instead make a bet of £1,000 that you will go to the gym every day for the rest of the year? I’m ready to take your money any time.

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