Incentives Matter - Preacher Edition

Slate magazine discusses a study by Chris Parsons, Jay Hartzell and David Yermack on the incentives of Methodist preachers, which is forthcoming in the Journal of Labor Economics (full copy of paper available at Parsons' site). One of the more interesting parts of the study concerns the strong financial incentives of the preachers.

A few highlights:

• Preachers receive about 3% of the incremental revenue from membership increases. They receive a pay increase of about $15 on average for each new member added and a decrease of about $7 for each lost member.


• The payoff from "stealing" members from other congregations was about double the payoff from converting non-Methodists and adding them to the congregation.