Finance and Economics Discussion Series

Starting Small and Ending Big -- The Effect of Monetary Incentives on Response Rates in the 2003 Survey of Small Business Finances: An Observational Experiment

Traci L. Mach, Lieu N. Hazelwood, and John D. Wolken
2008-26

Abstract: In 2003, the Survey of Small Business Finances (SSBF), conducted by the Federal Reserve Board, implemented the use of incentives to increase response rates. This study examines the effects of some of the characteristics of the implementation - such as level of effort, time in queue, and consecutively-increasing incentive amounts - on unit response. Our estimates suggest that as the number of days increase between the initial screener and main interview, the probability of completion decreases. Similarly, as the number of days increases between each consecutive incentive offer the probability of completion decreases. Additional effort, as measured by additional calls, increases the probability of completion. Finally, each consecutive offer after the initial offer decreases the probability of completion.

Keywords: Incentives, small business surveys, response rates, Survey of Small Business Finances, unit response