Forbes's latest issue has an interesting article "Cash Talks". Edward Miguel, Assistant Professor of Economics at UC Berkeley, argues that by providing cold cash to students as an incentive, we can expect "an improved classroom study environment, more student effort on homework and greater teacher motivation; teacher absenteeism fell by more than a fourth in the program schools." This is because "[a]dolescents often have extremely high rates of time discounting; in other words, they respond strongly to immediate punishments and rewards but do not adequately take into account the longer-term ramifications of their actions."

Frankly speaking, I cannot distinguish this incentive and merit-based scholarships. Does this incentive more broad based? Or of less value but is still attractive enough? Anyway, I agree with the author in that this will definitely be an economic way to boost grades. I am just wondering will this create an illusion for students that as long as they get good grades, they will be rewarded financially? It's simply not true in real life.

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