Does Premium Version Adoption in mHealth Improve User Engagement and Health-Related Outcomes?

We study the impact of premium adoption on mHealth user engagement and its weight loss effectiveness. Our empirical analysis uses unique panel data from a popular mobile food and exercise tracking app. To estimate the causal effect of premium adoption we use a propensity score matching method. The analysis reveals that premium adoption is linked to elevated engagement levels for food and exercise calorie tracking, daily goal achievement, exercise calories, as well as weight loss. Furthermore, these effects on engagement levels from premium adoption dampen quickly over time, but the weight loss effectiveness of the premium version is relatively persistent. Taken together, the dampening patterns of engagement appear to be more consistent with behavioral mechanisms that relate to sunk costs, rather than hedonic decline, moral licensing, self-control, and goal pursuit. Finally, we demonstrate that failure to account for endogeneity and selection will lead to an overstatement of these effects on user engagement and weight loss outcome, and discuss managerial implications of our findings